tag:blogger.com,1999:blog-57036757474218220562017-12-12T05:17:10.078-05:00Florida Real Estate AttorneyA blog dedicated to all things related to real estate law in Florida including foreclosure, construction, homeowners associations, closings, refinances, leasing and titleMichael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.comBlogger45125tag:blogger.com,1999:blog-5703675747421822056.post-61936207124895268772017-10-22T08:36:00.003-04:002017-10-22T08:36:43.713-04:00Termination of Condominiums (Bulk Owner)<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">Many condominiums in Florida have been subject to bulk buy-outs, either due to poor sales from the great recession or, in the case of older buildings, due to an aging ownership, high special assessments or major future repairs (roof or concrete restoration).<b>&nbsp; </b>This issue has led the Florida legislature to recognize that, in certain circumstances, continued operation of a condominium “may create economic waste and areas of disrepair which threaten the safety and welfare of the public or cause obsolescence of the property for its intended use and thereby lower property tax values.” <o:p></o:p></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;"><br /></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">To address this issue, the Florida legislature amended Florida Statute Section 718.117 to create a termination procedure outside the Declaration of Condominium process which generally requires unanimous approval of all owners in order to terminate the condominium under existing condominium documents.&nbsp; Specifically, the termination under this new section is “not an amendment subject to Florida Statute Section 718.110(4)” which sets forth that “no amendment may change the configuration or size of any unit in any material fashion, materially alter or modify the appurtenances to the unit, or change the proportion or percentage by which the unit owner shares the common expenses of the condominium and owns the common surplus of the condominium unless the record owner of the unit and all record owners of liens on the unit join in the execution of the amendment and unless all the record owners of all other units in the same condominium approve the amendment.”<o:p></o:p></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">The procedure often raised by bulk owners is known as an Optional Termination.&nbsp; Specifically, this type of termination may be initiated pursuant to a Plan of Termination of the Condominium as follows:<o:p></o:p></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">1.&nbsp; &nbsp; &nbsp;Must be approved by at least eight (80%) percent of Unit Owners.<o:p></o:p></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">2.&nbsp; &nbsp; If proposed by a Bulk Owner (an owner who directly or through affiliates controls 80% or more of the voting units), then, in addition, the following requirements:<o:p></o:p></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment to owners of “at least 100 percent of the fair market value of their units.”<o:p></o:p></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b.&nbsp; &nbsp; &nbsp; &nbsp; “Provide for payment of a first mortgage encumbering a unit to the extent necessary to satisfy the lien, but the payment may not exceed the unit’s share of the proceeds of termination under the plan.”<o:p></o:p></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; c.&nbsp; &nbsp; &nbsp; &nbsp;Include special notice within any proposed Plan that states:&nbsp; <o:p></o:p></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;i. “The identity of any person or entity that owns or controls 25 percent or more of the units in the condominium and, if the units are owned by an artificial entity or entities, a disclosure of the natural person or persons who, directly or indirectly, manage or control the entity or entities and the natural person or persons who, directly or indirectly, own or control 10 percent or more of the artificial entity or entities that constitute the bulk owner.<o:p></o:p></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;ii. The units acquired by any bulk owner, the date each unit was acquired, and the total amount of compensation paid to each prior unit owner by the bulk owner, regardless of whether attributed to the purchase price of the unit.<o:p></o:p></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;iii. The relationship of any board member to the bulk owner or any person or entity affiliated with the bulk owner subject to disclosure pursuant to this subparagraph.<o:p></o:p></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;iv. The factual circumstances that show that the plan complies with the requirements of this section and that the plan supports the expressed public policies of this section.<o:p></o:p></div><div class="MsoNormal" style="line-height: 200%; text-align: justify; text-indent: .5in;">Once the Plan of Termination is presented to the owners, it must be approved by Bureau of Condominium within forty-five days of presentation.&nbsp; If no owners object (see below) and the division approves the Plan (or if no approval, no rejection with forty-five days) then the termination may proceed as outlined within the Plan.<o:p></o:p></div><div class="MsoNormal" style="line-height: 200%; text-align: justify; text-indent: .5in;">Once the Plan is presented to owners, should five (5%) percent or more of the total voting interests of the condominium reject the plan of termination by negative vote or by written objection, the plan of termination <u>may not proceed</u>.&nbsp; In addition, if rejected by the required voting percentage, “a subsequent plan of termination pursuant to this subsection may not be considered for 24 months after the date of the rejection.”<o:p></o:p></div><div class="MsoNormal" style="line-height: 200%; text-align: justify; text-indent: .5in;">By way of example, if a condominium consists of one hundred units, then it would require the holder of not less than eighty units to vote to proceed with a plan of termination, and five or more-unit owners reject such plan, then termination will not be permitted.&nbsp; All such rejections should be made in writing and if the plan has been submitted to the Bureau of Condominium, that the written objection be filed therewith.<o:p></o:p></div><div class="MsoNormal" style="line-height: 200%; text-align: justify; text-indent: .5in;">With the continuing strength in the rental market and the ongoing failures at many condominiums, termination and conversion thereafter into apartments will continue to be a viable process for distressed condominiums and their owners.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify; text-indent: .5in;"><i>Michael Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate and can assist associations in all legal matters including bulk termination. They can be reached at 561.594.1452, or at mjposner@warddamon.com</i><o:p></o:p></div><div class="MsoNormal" style="text-align: center;"> </div><div class="MsoNormal" style="mso-layout-grid-align: auto; mso-pagination: widow-orphan; text-align: justify; text-autospace: ideograph-numeric ideograph-other; text-indent: .5in;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;<i><span style="font-size: 9.0pt; mso-bidi-font-weight: bold;"><o:p></o:p></span></i></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com2tag:blogger.com,1999:blog-5703675747421822056.post-46477548396898597412017-09-30T14:04:00.003-04:002017-09-30T14:04:15.341-04:00What Lawyers Do, a Specialization Guide<div class="MsoNormal" style="text-align: left;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Two things struck me this week regarding my profession. First, my son is trying to decide what type of lawyer he wants to be when he graduates from law school next spring. Second, while binge watching <i>Better Call Saul</i>, I was struck by Saul’s attempt to label himself an Elder Law Attorney simply by drafting a few wills.&nbsp; Putting aside that a lawyer who drafts wills is considered a Trust and Estates attorney, not an Elder Law attorney, I began to think about all the areas of practice in which we, as lawyers, specialize which, in many ways, are unknown to the public who think lawyers, know or should know, all areas of the law.</div><div class="MsoNormal"><o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; There are two main branches of practice, commonly divided between trial attorneys and transactional attorneys. Historically, and in actual practice in some countries, the trial attorneys were known as barristers. These attorneys present all cases in court at the direction of solicitors who handle the actual day-to-day practice of law and who handle all client relations. In many cases, the barrister receives the trial materials merely a day or two before the trial, presenting the case prepared by the solicitor. Barristers were forbidden to meet with clients or to even form partnerships with other barristers. However, many barristers banded together in groups called chambers in which they could share resources, office space and clerks.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the United Kingdom for example, barristers are still the most common trial attorneys though the fusion of practice between barristers and certain solicitors is continuing to expand in the United Kingdom. Barristers still wear horsehair wigs, stiff collars, bands, and a gown when appearing in court in the United Kingdom.&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the United States, the separation of barristers and solicitors has been eliminated and anyone who is licensed as an attorney may appear in any state court in which they are licensed. However, appearances in federal court still require an application, and in some cases also require the taking of a test. In many jurisdictions, including federal, admission to the appellate bar also requires an application and in some cases an examination. Admissions to the Federal Bankruptcy Bar requires both admission to the federal District Court for the applicable bankruptcy court, and passage of an examination and a minimum of continuing legal education credits. Admission to the United States Patent and Trademark bar requires passage of a very difficult exam and a scientific or engineering undergraduate degree. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Most lawyers today have a jurist doctorate degree issued by one of the United States’ one-hundred fifty plus accredited law schools. Many law schools also now offer certificates to their students, which allows a student to “major” in a specific area of law while in law school. These programs require the students to take a specific coursework in their “major,” and also to take one or two additional classes beyond the normal number required to graduate. Some programs also require maintaining a minimum GPA in the specialized area. Upon graduation, the student receives a separate certificate indicating the completion of the specialized coursework program.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In addition, there is also post-law school graduate work for further specialization. The most common is the Masters in Law in Tax, commonly known as the LLM degree. Many tax attorneys practicing today hold this graduate degree.&nbsp;&nbsp; Other LLM’s are available today including LLMs in international, real estate, health or environmental law.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On television, lawyers appear to handle a variety of legal matters including criminal and civil, transactional and litigation. While there still are some lawyers who handle a wide variety of cases, most lawyers specialize in a limited area of law. In litigation, there are lawyers who specialize in criminal cases, family law cases, commercial litigation, or civil litigation. Transactional lawyers also specialize, including areas such as real estate, corporate, intellectual property, licensing, sports law and other areas.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In Florida, lawyers who specialize in a specific area may, after practicing five years, stand for one of the many certification exams offered by the Florida Bar. These exams, when passed, allow a lawyer to state that they are Board Certified in that specific area.&nbsp;&nbsp; There are currently twenty-six areas of law for which lawyers may become Board Certified. This list continues to grow and includes both litigation and transactional areas of law.&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Armed with this knowledge, it makes it easier for you to properly select a lawyer to represent you in whatever matter your legal needs require. Choosing the correct lawyer is the first step to resolving your legal needs, and selecting someone who is not qualified to handle your case can lead to poor representation and an unhappy outcome.<o:p></o:p></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal"><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm with offices in Palm Beach County and a Board Certified Real Estate Attorney who handles a variety of real estate matters throughout South Florida.&nbsp; He can be reached at 561.594.1452, or at mjposner@warddamon.com</i><o:p></o:p></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com3tag:blogger.com,1999:blog-5703675747421822056.post-21589033286496387902017-03-11T13:03:00.002-05:002017-03-11T13:03:15.489-05:00President Trump and Real Estate<div class="MsoNormal">&nbsp; &nbsp;Many people believe that Trump will be good for business and real estate, due to his career which was heavily involved in commercial and real estate.&nbsp; This is yet to be seen, but right out of the gate Trump had an effect on the real estate market by his issuance of his first Executive Order on inauguration day.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The issue in question was the action by President Obama, in the waning days of his administration, to reduce the premium for mortgage insurance on mortgages guaranteed by the Federal Housing Administration (FHA).&nbsp; These loans are usually financed with only three to five percent down, and as such, require mortgage insurance to cover the possibility of a deficiency upon default due to the limited amount of equity in the property.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The mortgage insurance premium is a monthly fee tied to the loan size, loan term and includes an upfront premium of 1.75% of the loan amount and between 45 and 105 basis points (0.45% to 1.05%) annually on the loan balance, paid in monthly installments with the principal and interest payments.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earlier in January, 2017, President Obama directed a 25-basis point (0.25%) cut in the premium which was estimated to save consumers, on average, at least $25.00 per month.&nbsp; This decision was based, in part, on the belief that the funds that insure these mortgages have sufficient reserves to allow for a premium reduction. However, only four years ago, taxpayers funded a 1.7-billion-dollar bailout of the FHA to fund shortfalls in the insurance fund due to a large number of loan defaults.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In response to the action by the outgoing President, Trump issued an Executive Order cancelling the reduction.&nbsp; This action was taken, in part, as a reaction to the Obama administration adopting new policies as it prepared to leave office, but was also taken due to the concern that a premium reduction puts taxpayers at risk due to decrease in the insurance funds available to the FHA to cover defaults.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Another issue on President Trumps agenda is reducing or eliminating the mortgage interest deduction. Currently married homeowners who itemize their taxes can deduct interest on mortgages of up to one million dollars ($500,000 for single persons).&nbsp; The deduction is supported by Realtors, home builders and bankers who use it as a selling point to potential home buyers.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; However, the number of home owners who itemize is not as popular as some believe.&nbsp; At least a third of homeowners have no mortgage, and many lower and middle income homeowners do not itemize their taxes, losing any potential deduction from the interest that they pay on their mortgage.&nbsp;&nbsp; The Tax Policy Center states that the mortgage interest deduction mostly benefits wealthier Americans.&nbsp; “Instead of turning renters into homeowners, homeownership tax expenditures encourage middle- and upper-income individuals to purchase more expensive homes, take on more debt, or buy second homes.”<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trump’s plan is to cap total available deductions at $100,000.&nbsp; This cap will only affect the wealthiest, since even on a $500,000-dollar loan at five percent, the total interest deduction in year one of the loan would be $25,000.&nbsp; However, when you consider other deductions that come into play such as property taxes, charity, medical expenses and the like, the cap will affect some homeowners, especially wealthier homeowners who now have deductions that far exceed $100,000.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The National Association of Realtors will strongly oppose any measure to reduce the mortgage interest rate deduction, as they believe that this will impact home ownership.&nbsp; With ownership levels continuing to fall, the President of NAR has said that NAR is “adamant about protecting tax deductions for residential mortgage interest and property taxes—for primary and secondary homes.”<o:p></o:p></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They can be reached at 561.594.1452, or at mjposner@warddamon.com</i><o:p></o:p></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com8tag:blogger.com,1999:blog-5703675747421822056.post-68276177478209064942017-03-11T13:02:00.001-05:002017-03-11T13:02:14.722-05:00Binding Arbitration (The Wells Fargo Dilemma)<div class="MsoNormal">&nbsp; &nbsp; &nbsp;Wells Fargo Bank was recently caught opening thousands of unwanted accounts, resulting in millions of fees charged to unsuspecting customers.&nbsp; After an investigation, Wells admitted its failures and has promised to make things right by its customers.&nbsp; Since then a number of class action lawsuits have been filed, and Wells has, to-date, successfully stopped the lawsuits, invoking the arbitration clause of the standard Wells Fargo bank account contract, as follows: <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><i>You and Wells Fargo Financial National Bank (the “Bank”), including the Bank’s assignees, agents, employees, officers, directors, shareholders, parent companies, subsidiaries, affiliates, predecessors and successors, agree that if a Dispute (as defined below) arises between you and the Bank, upon demand by either you or the Bank, the Dispute shall be resolved by the following arbitration process. However, the Bank shall not initiate an arbitration to collect a consumer debt, but reserves the right to arbitrate all other disputes with its consumer customers. A “Dispute” is any unresolved disagreement between you and the Bank. It includes any disagreement relating in any way to your Credit Card Account (“Account”) or related services. It includes claims based on broken promises or contracts, torts, or other wrongful actions. It also includes statutory, common law and equitable claims. A Dispute also includes any disagreements about the meaning or application of this Arbitration Agreement. This Arbitration Agreement shall survive the payment or closure of your Account. You understand and agree that you and the Bank are waiving the right to a jury trial or trial before a judge in a public court. As the sole exception to this Arbitration Agreement, you and the Bank retain the right to pursue in small claims court any Dispute that is within that court’s jurisdiction. If either you or the Bank fails to submit to binding arbitration following lawful demand, the party so failing bears all costs and expenses incurred by the other in compelling arbitration.</i><o:p></o:p></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">Many consumers and lawyers have fought the use of this provision.&nbsp; They argue that it unfair due to the cost, privacy, the possible bias of arbitrators and, most importantly, the inability to bring a class action lawsuit (which allows one case to be brought by many consumers who have similar claims).&nbsp; Instead, the arbitration cases must be brought against the bank one at a time.&nbsp; Wells argues that the parties agreed to these terms when the accounts were opened. However, lawyers have argued that since the fake accounts were never agreed to by the consumer, the terms of the standard contract they signed to open prior, legitimate accounts, does not apply.&nbsp; So far Wells has been successful in moving lawsuits to arbitration.&nbsp; Eventually the issue may be decided by an appellate court, but for now, consumers need to be aware of these clauses in their dealings with large corporations.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">While arbitration is generally binding on the parties, mediation is another method of resolving disputes prior to court or trial.&nbsp; Mediation is non-binding, which means that the mediator cannot rule on the case, and if the parties do not agree to a settlement, the matter continues to litigation.&nbsp; Mediation either occurs through contract, a pre-suit statutory requirement, or by court order (which occurs in almost all civil cases today).<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">For example, in the most common real estate contract used in South Florida, all disputes under the contract must be settled by mediation prior to any lawsuit being instituted:<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><i>Buyer and Seller shall attempt to settle Disputes in an amicable manner through mediation pursuant to Florida Rules for Certified and Court-Appointed Mediators and Chapter 44, F.S., as amended (the "Mediation Rules").&nbsp; The mediator must be certified or must have experience in the real estate industry. Injunctive relief may be sought without first complying with this Paragraph 16(b). Disputes not settled pursuant to this Paragraph 16 may be resolved by instituting action in the appropriate court having jurisdiction of the matter</i><o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">In Homeowner Association disputes, matters may be resolved by either pre-suit mediation or binding arbitration, depending on the nature of the dispute.&nbsp; Disputes regarding condominium associations can be subject to mandatory nonbinding arbitration depending on the nature of the claim.&nbsp; This special type of arbitration results in a final decision of the arbitrator, but is subject to all regular appellate rules, making the ability to appeal the arbitration decision no different than a decision by a trial court.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">In and of itself, arbitration, as a method to resolve disputes, is not better or worse than court.&nbsp; It is often faster and cheaper than litigation, and many people prefer the privacy that a public trial does not provide.&nbsp; It also offers more finality, as the grounds for a trial court appeal do not apply, though under certain limited circumstances, the arbitration decision can be appealed.&nbsp; <o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><br /><div class="MsoNormal"><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They can be reached at 561.594.1452, or at mjposner@warddamon.com</i><o:p></o:p></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com1tag:blogger.com,1999:blog-5703675747421822056.post-52740690122980046812016-11-23T07:39:00.001-05:002016-11-23T07:39:48.709-05:00Allowing Pets in Apartments, Homes and Associations<div class="MsoNormal"><o:p>&nbsp;</o:p>&nbsp; &nbsp; &nbsp;With the increased level of pet ownership, issues regarding “faux emotional support animals” (a situation where an owner/tenant is bending or breaking the rules to obtain a pet accommodation when pets are banned) and the need to attract more tenants and buyers, many apartments, landlords and condominium associations have started to adopt pet friendly rules.&nbsp; If you are considering allowing pets as a landlord or association, you should consider adopting special rules and regulations to control the living and activity of any pet allowed in your property.</div><div class="MsoNormal"><o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;The starting point should be the registration of any permitted pet.&nbsp; This would include an application describing the pet, its weight, color, breed, sex, vaccination status, county registration and spay/neuter information.&nbsp; Each owner should also be required to provide a current vaccination and rabies certificate from their local veterinarian.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;A set of rules should be provided to each owner with specific limitations and restrictions.&nbsp; These could include a requirement for annual vaccination, a limitation on the number of pets (and no guest pets), a limitation on certain breeds; a weight limitation (many owners/associations have a twenty to twenty-five pound weight limit); a leash requirement; a specific place for pet defecation; a solid waste removal requirement and provisions to prevent breeding, noise/barking; restrictions on leaving pets on a balcony or outdoors; restrictions on leaving pets alone for long periods; and a removal policy for any violent or aggressive behavior against other owners and guests.&nbsp; All Rules should be acknowledged that they have been read by a tenant/pet owner.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;A pet deposit is often a special condition of landlords that permit pets.&nbsp; The deposit should be separate and apart from the security deposit.&nbsp; The deposit can be either refundable or non-refundable.&nbsp; Most deposits are in the $200 to $300 range.&nbsp; For Associations, a common area deposit can be used to include damage caused by owners and their pets to common areas.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;All pet owners should be required to provide appropriate renter’s insurance which should provide coverage for both damage caused by the pet and for any personal injury caused by the pet, be it a simply excited dog knocking someone over or a vicious cat or dog that bites or scratches someone on the property.&nbsp; Some basic renter policies exclude or limit animal coverage, especially as it relates to certain breeds, so this issue must be reviewed before allowing certain pets.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp; For associations and apartment buildings that have had solid waste issues, it is now common to require DNA registration of all approved pets and to adopt a fine for failing to pick up after a pet goes on common areas.&nbsp; As part of any approval of a pet, the animal’s cheek is swabbed and the dog’s DNA is registered by a company that provides a monitoring service.&nbsp; If uncollected feces are found, the solid waste is collected and a small sample sent to the testing company.</div><div class="MsoNormal"><o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;Once tested and compared to the DNA information on file, the testing company can determine if any registered dog is the responsible pet.&nbsp; Once identified, the pet’s owner can then be fined for the violation plus the cost of the test.&nbsp; The average cost for a service like this is about $50 per pet at the registration phase and $75-150 to test the feces to determine a match.&nbsp; Combining DNA testing, fines for violations and Poop Bag Stations can eliminate most issues relating to uncollected waste.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;Proper planning, deposits and rules can go a long way to eliminate most issues relating to allowing pets.&nbsp; This will expand the pool of buyers/tenants and prevent common problems from hidden pets, faux ESA animals or unregulated animals in places where pets are permitted but no procedures have been adopted.<o:p></o:p></div><div class="MsoNormal"><br /></div><span style="font-family: &quot;Arrus BT&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate and can assist landlords and associations in addressing animal issues.&nbsp; They can be reached at 561.594.1452, or at mjposner@warddamon.com</i></span>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com7tag:blogger.com,1999:blog-5703675747421822056.post-31712356898248712432016-10-31T13:07:00.003-04:002016-10-31T13:07:36.647-04:00Guest Blog: Protect Yourself from a Lawsuit by an Unlicensed Contractor<div class="MsoNormal">By&nbsp;Richard Lansing</div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Every home owner in the country wants to get as much as they can for as little as possible. That is reasonable, but it can lead people down some risky paths. One of those paths, which is quite commonly utilized by first time buyers especially, is the hiring of an unlicensed contractor. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Some needed home repairs and a simple web search leads a homeowner to get measurements from a gentleman who shows up at your door. He is dressed reasonably nice for a contractor (jeans and a polo), and all his construction equipment looks right. He takes measurements, provides a quote that is almost too good to be true (1/3rd less than the first contractor you called) and the next week he and his crew are ripping out your kitchen sink or replacing the master bathtub. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; What happens when Mr. Contractor gets injured? It might seem “fair” that he’d have to pay his own medical costs. Businesses should carry insurance, after all. Except that without a license, your contractor cannot apply for a business license. According to construction consultant <a href="http://www.lylecharles.com/">Lyle Charles</a>, “the reality is that home owners often end up carrying that burden when the contractor is uninsured. It is one of the dirty secrets of low-cost home renovations.”<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In order to become a licensed contractor, there are a few things a person must demonstrate to the state a number of items, and usually take a competency exam. Contractors must pass a contractor’s exam in order to acquire a contractor’s license. A contractor must also carry insurance when you register as an LLC, or other business entity. That insurance protects employees and the job site.&nbsp; To protect the public, Florida actively pursues unlicensed contractors by performing sting operations in conjunction with local police. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As you can imagine, all this licensing and exam work takes time and costs money. Contractors who charge more for their work have earned the right to do so through state licensure. They carry liability insurance that protects you, the homeowner, from the consequences of their on-the-job injuries. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Before you hire that unlicensed contractor, stop and think about the potential hazards:<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Natural Disaster: If your home was recently damaged by a natural disaster, the unlicensed contractor may not be able to perform the work legally. That could limit your insurance settlement. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property Value: Someone unlicensed who performs major work, such as adding a room to your home, could reduce the property value because the addition will not have the proper permits or be built to the building code. Plus, homeowners are required to disclose unlicensed/unpermitted work when selling their home. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Protection from Injury: Not just of the contractor, but the surrounding area. If the contractor drops a heavy tool on a car, for instance, whatever dent or scratch is left behind might end up costing you for the repair. The same goes for personal injury claims if that contractor hurts a neighbor.&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Damages: If an unlicensed contractor fails to complete the work, does it in a poor manner or causes damage, the unlicensed contractor might disappear entirely, and often cannot be found if you need to sue. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; There is both good news and bad news. Before we continue, it’s best to speak directly with an attorney, as they will provide recommendations more directly related to local laws you must comply with regarding permits and association requirements for repairs. That said, there are some general guidelines you can keep in mind when you’re looking for a contractor and considering going with someone who is unlicensed.&nbsp; &nbsp;<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; You can file a lawsuit against an unlicensed contractor if there are damages to your property, or if he causes injury somehow (either to himself or someone else). Being unlicensed is, in some ways, actually a bigger risk than whatever risks come from the job itself. As a homeowner dissatisfied with a job, you can also stop payment to the contractor or refuse payment altogether. Most unlicensed contractors also do not write up agreements, so there is no contract that details their responsibility. Prices change, homeowners refuse payment, and accidents happen. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Generally, if you try and sue an unlicensed contractor you will probably have to show the two of you attempted to work out a solution between yourselves. It should not cost you much more than a few thousand dollars in attorney’s fees to get some representation on your side if you need it for a default (if the contractor doesn’t show). You’ll have to wait a few years to collect, but once that default is renewed you can send the bill to collections and hope for your money to arrive. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If you decide to file a lawsuit, consult an attorney familiar in construction law over someone who is general practice. That expertise will come in handy, as the intricacies of construction law require someone well versed. <o:p></o:p></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Going with an unlicensed contractor might sound great because you will save on the upfront costs, but it can cost you in the long run. There is simply too much risk with injury lawsuits, property damage and a lack of dispute resolution, to chance hiring a contractor who does not carry a license.&nbsp;<o:p></o:p></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com6tag:blogger.com,1999:blog-5703675747421822056.post-91736826553749552142016-10-09T12:16:00.004-04:002016-10-09T12:18:25.575-04:00Renting or Buying 2016<div class="MsoNormal" style="text-align: center;"><div style="text-align: justify;">&nbsp; &nbsp; &nbsp; &nbsp;The dream of home ownership is as American as hot dogs, baseball and apple pie.&nbsp; At least that was the theory until the great recession that ruined home ownership for millions.&nbsp; With the economy mostly recovered, mortgage interest rates at all-time lows and rents rising, is it now better, once again, to own or rent.</div></div><div class="MsoNormal"><o:p></o:p></div><div class="MsoNormal"><div style="text-align: justify;"><br /></div></div><div class="MsoNormal"><div style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Homeownership levels continue to fall with the level of ownership hitting a 50-year low last quarter.&nbsp; Currently only 62.9% of households are owner-occupied.&nbsp; Ownership levels are highest for seniors, and at an all-time low for millennials at 34.1%. The decline is due to several factors<o:p></o:p></div></div><div class="MsoNormal"><div style="text-align: justify;"><br /></div></div><div class="MsoNormal"><div style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On strictly financial basis, using a five-year period of ownership and making some basic assumptions (your mileage may vary), renting versus owning is nearly a wash, with homeownership slightly less expensive:<o:p></o:p></div></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Renting</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Owning</u><o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal">Monthly Payment&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $1,350.00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $ &nbsp;&nbsp;954.83&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal">Taxes/Insurance&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 20.00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;400.00<o:p></o:p></div><div class="MsoNormal">HOA Assessments &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;0.00 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;100.00<o:p></o:p></div><div class="MsoNormal">Maintenance&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.00 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;250.00<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">Monthly Costs&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $1,345.00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $ 1,704.83<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">Down Payment&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $50,000.00<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">Five Year Cost&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $80,700.00 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$152,289.80<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">Less Interest on Down Payment (2%)&nbsp;&nbsp; ($5,204.40)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">Less Increase in Value (3%) &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$(39,818.00)<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">Less Principal Reduction/Equity &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $(69,105.00)<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">Interest Expense/Deduction &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$<u>520.40</u>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $(7,636.80)<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">Plus Costs of Purchase/Sale&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>$28,185.00</u><o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Cost&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>$75,495.60 &nbsp; &nbsp;</u>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<u>$63,915.00</u><o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><div style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This chart is based on a $250,000 home, a $50,000 down payment, an association payment of $1,200 a year, rent averaging $1,350 a month over five years, maintenance costs of $3,000 per year, a sales price of $278,750 after five years, plus the renter investing the $50,000 at an average of 2% and the homeowner’s home value increasing at a rate of 3% per year.&nbsp; Given these factors, the savings over five years is approximately $12,000.&nbsp; This includes costs of purchase of $5,000 and costs of sale (including a real estate commission of $23,185).&nbsp; <o:p></o:p></div></div><div class="MsoNormal"><div style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div></div><div class="MsoNormal"><div style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Longevity: Determining whether to rent or own is dependent on several important factors.&nbsp; First, how long do you plan to stay in your next home has to be determined, because one of the best benefits of home ownership is tied to longevity of ownership.&nbsp; Our sample favors renting through year three, with each year thereafter supporting buying. <o:p></o:p></div></div><div class="MsoNormal"><div style="text-align: justify;"><br /></div></div><div class="MsoNormal"><div style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; One key factor tied to longevity is how mortgage loans are front loaded with mostly interest.&nbsp; Fixed Rate Mortgages are amortized to provide a fixed monthly payment over the life of the loan.&nbsp; Initially the payments are mostly interest, with only a small amount going to principal.&nbsp; A typical $250,000 house with a $200,000 loan will only have principal reduced by $19,000 if sold within the first five years.&nbsp; It takes nearly 20 years to reach a 50% reduction in the loan balance.<o:p></o:p></div></div><div class="MsoNormal"><div style="text-align: justify;"><br /></div></div><div class="MsoNormal"><div style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tax Deduction:&nbsp; One benefit of homeownership is the ability to deduct mortgage interest paid on loans to acquire and improve the home. This can be worth thousands in tax savings during the early years of a mortgage.&nbsp; However, many people do not have enough deductions to make itemizing their taxes worthwhile, and this benefit is lost if the homeowner cannot itemize their taxes. <o:p></o:p></div></div><div class="MsoNormal"><div style="text-align: justify;"><br /></div></div><div class="MsoNormal"><div style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Maintenance:&nbsp; One drawback of homeownership is the requirement of maintenance of the home from lawns, to painting, to repairs and replacements.&nbsp; Renters mostly rely on the landlord to handle maintenance, repair and replacement costs.&nbsp; Homeowners have to bear the full cost, which can be very expensive.&nbsp; A new a/c system costs over $2,000, and a new roof can run from $7,500 to $30,000 depending on whether its shingle, cement or barrel tile roof system.&nbsp; <o:p></o:p></div></div><div class="MsoNormal"><div style="text-align: justify;"><br /></div></div><div class="MsoNormal"><div style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Down Payment:&nbsp; The down payment is the largest bar to home ownership, especially for younger and first time buyers.&nbsp; Typically, the down payment is twenty percent of the purchase price.&nbsp; This is a large sum that may be difficult for many to accrue, and even the three percent down payment on an FHA loan may still act as a bar when coupled with closing costs that easily exceed $5,000.&nbsp; Renters only usually need first last and security, which is far less than the full down payment, but can be equal to the FHA down payment.&nbsp; Taking the twenty percent down payment and investing in an indexed fund instead of buying can often result in a substantial gain versus homeownership, which has seen both large value increases and decreases in recent years (the S&amp;P has returned 78% over the last five years).<o:p></o:p></div></div><div class="MsoNormal"><div style="text-align: justify;"><br /></div></div><div class="MsoNormal"><div style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Portability.&nbsp; Renting is for a fixed term, customarily for one year.&nbsp; Many leases provide a right to terminate early for a two-month rent penalty (an attempt to make this a Florida law did fail).&nbsp; This ability to move quickly is often better for single and married couples without children.&nbsp; Having to move for a career opportunity as a homeowner can mean carrying a mortgage and paying rent on two places until the first owned home is sold.<o:p></o:p></div></div><div class="MsoNormal"><div style="text-align: justify;"><br /></div></div><div class="MsoNormal"><div style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Given the initial costs, down payment, the burden of maintenance, the loss of the ability to move quickly means that the decision to buy instead of rent can be difficult for many people, especially if they are likely to need to move in less than five years.&nbsp; Committing to longer term ownership is when the decision becomes in favor of homeownership, ultimately saving money in the long run.<o:p></o:p></div></div><div class="MsoNormal"><div style="text-align: justify;"><br /></div></div><div style="text-align: justify;"><i>Michael J Posner, Esq., is a partner at Ward Damon, a mid-sized real estate and business oriented law firm serving all of South Florida, with offices throughout Palm Beach County.&nbsp; Michael specializes in real estate law and business law, and can help sellers, buyers landlords and tenants with their real estate issues.&nbsp; Michael can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com.</i></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com6tag:blogger.com,1999:blog-5703675747421822056.post-6444172441209173892016-08-24T06:57:00.004-04:002016-08-24T06:57:25.941-04:00Condo/Coop Retrofitting Fire Sprinklers - The Lowrise Debate Rages<div class="MsoNormal">In 2010, the Florida legislature changed Florida Statute Section 718.112(2)(l) to amend the rules regarding the requirement for retrofitting of sprinklers in condominium (and cooperative buildings under 719.1055(5)(a)).&nbsp; The change removed the following key provisions:<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><i>For purposes of this subsection, the term "high-rise building" means a building that is greater than 75 feet in height where the building height is measured from the lowest level of fire department access to the floor of the highest occupiable story. For purposes of this subsection, the term "common areas" means any enclosed hallway, corridor, lobby, stairwell, or entryway. In no event shall the local authority having jurisdiction require completion of retrofitting of common areas with a sprinkler system before the end of 2014.<o:p></o:p></i></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><br /></div><div class="MsoNormal" style="margin-right: .5in;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This change has sparked a controversy as to whether all condominiums are now required to either retrofit sprinklers or vote to waive retrofitting no later than December 31, 2016.&nbsp; This change was intentional and by doing so the legislature specifically intended the law to apply to all condominiums, not just high-rises.&nbsp;&nbsp; As this is state law, it trumps any local limitation or requirement which would limit or not require such installation for condominiums under seventy-five feet in height.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal" style="margin-right: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">The starting point for compliance is the Division of Florida Condominiums, Timeshares, and Mobile Homes, the state body that regulates condominiums.&nbsp; In its written statement on the issue the Division has stated that:<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><i>Condominium and cooperative associations are required to report to the division certain information regarding the membership vote to waive retrofitting requirements for fire sprinkler systems and handrails and guardrails. If the association does not waive retrofitting requirements, it must report the per unit cost of retrofitting to the division<o:p></o:p></i></div><div class="MsoNormal" style="margin-right: .5in; text-indent: .5in;"><br /></div><div class="MsoNormal" style="margin-right: .5in; text-indent: .5in;">The Division makes no distinction between high rise and low rise condominiums.&nbsp; As a result of the change in the law and the Division not ruling that the law does not apply to condominiums below seventy-five feet in height, it means that absent a change, all condominiums and coops must either vote to waive retrofitting or start the retrofit process by the end of the year and report their actions to the Division.&nbsp; As late as early July, 2016 Travis Keels, deputy director of communications for the Florida Division of Condominiums stated, “Generally speaking, the fire sprinkler requirement applies to all residential condominiums.”<o:p></o:p></div><div class="MsoNormal" style="margin-right: .5in; text-indent: .5in;"><br /></div><div class="MsoNormal" style="margin-right: .5in; text-indent: .5in;">However, due to contradictory laws relating to low rise sprinklers, there are now many voices asserting claims that the law does not actually require retrofitting for low rise condos/coops.&nbsp; The Florida State Fire Marshall issued a statement saying that: “The Florida Fire Prevention Code… requires only high-rise buildings that do not have exterior access from each dwelling unit to be protected throughout by an approved, supervised automatic sprinkler system.”&nbsp; However, the Fire Marshall also recognized that their office “…cannot interpret the provisions of Chapter 718.112, Florida Statutes.” <o:p></o:p></div><div class="MsoNormal" style="margin-right: .5in; text-indent: .5in;"><br /></div><div class="MsoNormal" style="margin-right: .5in; text-indent: .5in;">Senator Jerry Ring, a sponsor of the 2010 legislation that changed the law, has also commented on the issue.&nbsp; He stated, in a letter dated July 28, 2016, to the Director of the Division of Florida Condominiums:<o:p></o:p></div><div class="MsoNormal" style="margin-right: .5in; text-indent: .5in;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><i>It is regrettable that the Division’s “interpretation” of a 6 year old statutory amendment comes to light through a newspaper quotation a mere 5 months before the opt out deadline expires, and at a time of year when many communities have difficulty conducting business (let alone owner votes) due to seasonal absences. While I recognize that the comments made were undoubtedly in good faith, they are simply an incorrect interpretation of legislative intent. Due to the amount of concern that this newspaper quote has generated, especially in light of its timing, I am requesting that the Division issue a press release consistent with the intent of the Legislature.<o:p></o:p></i></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><i><br /></i></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><i><o:p></o:p></i></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The problem is while the letter is well meaning, it is not a change in the law, merely one legislator’s interpretation of the intent of the law.&nbsp; Therefore, we are recommending that all condominiums and coops start the process to waive retrofitting by either a member meeting or a written consent to action.&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal" style="text-indent: .5in;">The written consent allows for votes to be collected from local and absent owners by signing a written statement voting to waive retrofitting.&nbsp; Interestingly, the Division allows even Associations that do not have express power to approve matters by written consent to use this process, “Voting by written consents or written agreements may be utilized by an association regardless of whether the bylaws or the declaration specifically permit voting by written consents or written agreements.”&nbsp; In order to waive the costly installation, the vote must be made by the “affirmative vote of a majority of all voting interests in the affected condominium.”&nbsp; Now is the time act, as sufficient votes to waive must be received no later than the end of the year.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><br /><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><i>Michael Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate and can assist community associations in all legal matters including retrofitting votes. They can be reached at 561.594.1452, or at mjposner@warddamon.com<o:p></o:p></i></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com4tag:blogger.com,1999:blog-5703675747421822056.post-40370601802314511532016-07-06T15:46:00.002-04:002016-07-06T15:46:09.176-04:00Eight Real Estate Mistakes<div class="MsoNormal">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deeds without estate status: So you want to add dad, mom or a brother to your Florida property, so you get a Quit Claim Deed from an out of state lawyer, an office supply store or online, fill it out and mail in to be recorded. Three years later they die, and when you go to sell you discover that in order to clear their interest you will need to file an ancillary administration in Florida.&nbsp; $3,000 and a few months later you close and get to share the proceeds with their heirs.&nbsp; This can all be avoided by using the proper language to effectuate what your intent is on that deed.&nbsp; If you want the property to go to everyone’s heirs, do nothing, but if you want to be sure that the property goes to the surviving grantees, simply add, “<i>joint tenants with full rights of survivorship, and not as tenants in common</i>” after the grantee’s name and upon their death, the title goes to the remaining grantee without probate.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Grandma’s Condo: If you own a second home/condominium in Florida and are a resident of another state, you can avoid two probates by simply deeding your second Florida property to yourself for life with a remainder to your chosen heirs. Then, when you die, no probate is necessary.&nbsp; You can even keep full control by adding Ladybird Powers to your Life Estate Deed.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Applying for Homestead: Florida’s constitutional homestead is an automatic protection arising as soon as you take residency of your Florida home.&nbsp; However, the statutory homestead tax break requires that you apply by March 1 of the year after you purchase.&nbsp; Forgetting to apply will costs you about $500 each year, and you will lose a 3% cap on annual appraisal increases. If you closed last year and did not apply, you can still submit an application and ask for a late filing waiver.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Home Improvements: Getting ready to sell your house but need some work done that requires a contractor?&nbsp; If it is a short job, you should change the automatic one year life of that Notice of Commencement required for permitted jobs to the actual time needed to complete the work.&nbsp; Otherwise, when you do sell you will have to hunt down that contractor and possibly some subcontractors to get release of liens, even though the job was done on one week and it has been eleven months since your house improvement was completed.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loan Payoff Surprise: Many people are surprised at closing when their mortgage payoffs are far higher than their last mortgage statement.&nbsp; For example, if you borrowed $500,000 at 5% five years ago, and you are closing August 10, (and you were told not to make the August mortgage payment) and your August mortgage statement says you owe $448,866.09 in principal, your closing statement could say you owe almost $3,000 more.&nbsp; That is because mortgages are paid in arrears, meaning that the July payment you made was for interest in June.&nbsp; So at that August 10th closing they are collecting interest on the principal balance from July 1 to August 10, plus a week extra to cover mailing in the payment.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage Insurance: Did you purchase your home with less than 20% down?&nbsp; Then you probably pay mortgage insurance every month.&nbsp; The insurance is supposed to stop once the loan amount equals 80% of your home’s appraised value.&nbsp; However, it is the owner’s responsibility to request this relief.&nbsp; If you think you have hit 80% mark, contact your lender, because each month you delay could easily costs $83 per month for each $100,000 you borrowed.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Rubber Hoses: Go in your laundry room and look at the hoses connected to your washing machine.&nbsp; If they are black rubber then (i) confirm you have flood insurance; and (ii) get in the car and go to Lowes or Home Depot and buy braided stainless steel hoses in the same length.&nbsp; Installation is easy, turn of the water to the washing machine, remove old hoses and install new hoses. Burst rubber hoses are probably the number one cause of flood in homes.&nbsp; You do have flood insurance too?&nbsp; Many do not so take the time and do one of the easiest fixes possible to protect your home.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage Interest: Do you know what interest rate you are paying on your home mortgage?&nbsp; Many people close on a loan when they buy and then never refinance, throwing away thousands of dollars.&nbsp; If you borrowed $300,000 ten years ago at 6% you are paying $1,798 a month.&nbsp; If you refinanced all $300,000, that full amount at today’s rate of 3.75% your payment would drop to $1,389 and after closing costs you would have about $40,000 in your pocket.&nbsp; The smartest move would be to refinance only what you owe for 15 years.&nbsp; Your payment would still be lower by $300 a month and you would shave another five years on your existing loan. &nbsp;<o:p></o:p></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal"><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate law and business law, and can with these and other real estate mistakes (except the plumbing tip!).&nbsp; They can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com<o:p></o:p></i></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com10tag:blogger.com,1999:blog-5703675747421822056.post-79110262381376232442016-03-18T13:33:00.003-04:002016-03-18T13:33:20.840-04:00Emotional Support Animals 2016 Update&nbsp; &nbsp; &nbsp;Emotional support animals have and continue to be a divisive issue in condominium communities, pitting the “no pet” contingent against those who desire to keep an animal to alleviate a disability. &nbsp;The issue of fake service and emotional support animals has led to the Florida state legislature enacting a new law that criminalizes parties who falsely claim to have a service animal under the Americans with Disability Act (“ADA”): A person who knowingly and willfully misrepresents herself or himself, through conduct or verbal or written notice, as using a service animal and being qualified to use a service animal or as a trainer of a service animal commits a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083…<br /><br /><span class="Apple-tab-span" style="white-space: pre;"> </span>Unlike service animals under the ADA, the residential community issue falls under a separate law established under the Florida and Federal Fair Housing Acts (the “Act”). &nbsp;Federal lawsuits under the Fair Housing Act, arbitration claims with the Florida Department of Business and Professional Regulation and Administrative Complaints with the United States Housing and Urban Development continue to be filed, as communities struggle with addressing requests for a reasonable accommodation.<br /><br /><span class="Apple-tab-span" style="white-space: pre;"> </span>Two main issues continue to be raised in the cases being filed by owners and associations. &nbsp;First, is the person, in fact disabled such that the disability impairs or limits a major life activity. &nbsp;In many cases, the letters from doctors or mental health professionals fail to properly document or substantiate that a disability, in fact, exists. &nbsp;Instead, they describe certain ailments of the person they are treating without stating that the ailment rises to a disability that does impair a major life activity. &nbsp;The disability letter must be clear that a recognizable disability exists and that the specific disability significantly impairs a major life activity. &nbsp;For example, a statement from the medical professional that contains language similar to the following may be sufficient to meet the initial burden of the Act, “Due to (describe the disability), he has certain limitations which substantially affect the following major life activity, to-wit: (Describe how such disability affects the patient).”<br /><br /><span class="Apple-tab-span" style="white-space: pre;"> </span>The second test is that the animal in question must, in some fashion, alleviate the symptoms of the disability and the person making the request has a need for the assistance. &nbsp;The animal does not have to be specially trained depending on how the animal alleviates the disability. &nbsp;Some Associations will not approve an ESA without proof of special training and this can lead to a violation of the Act by the Association. &nbsp; <span class="Apple-tab-span" style="white-space: pre;"> </span>The same disability letter should state what and how the animal alleviates the diagnosed symptoms, and the medical professional could include language such as, “In order to help alleviate these disabilities, and to enhance the patient’s ability to live independently and to fully use and enjoy the residential unit located within the condominium, I have prescribed an emotional support animal that will assist him in coping with his disability by the following assistance (describe how animal alleviates the disability). &nbsp;Assuming both tests are actually met, the Association, under the Act, is required to make a reasonable accommodation.<br /><br /><span class="Apple-tab-span" style="white-space: pre;"> </span>Several recent cases have addressed elements of these issues, but as these are ongoing cases without final resolution, it is not clear the ultimate outcome. &nbsp;In a truly tragic case between Alexander Peklun and the Tierra Del Mar Condominium, both sides moved for summary judgment in a reasonable accommodation case. The background of this case is what Plaintiff alleges led to the suicide of the disabled owner. In denying both motions, the United States District Court in December, 2015 entered an order that included several rules that may help clarify the obligations of owners and associations. &nbsp;First, a reasonable accommodation is not a lifetime grant, and an association has a reasonable right to request follow-up information. &nbsp;Second, not all ailments are “disabilities” that the Act was intended to protect. &nbsp;However, the court found that sleep apnea, did interfere with a major life activity and rose to a level of a protected disability. &nbsp;Third, the emotional support animal is not required to have task specific training (this issue is often confused, as was in the Peklun case, between a service animal, which is specially trained, and an emotional support animal).<br /><br /><span class="Apple-tab-span" style="white-space: pre;"> </span>In a Texas 2015 case (Chavez v. Aber), the United States District Court found that an employee of an owner can be found liable for violating the Act. &nbsp;The employee defended on the grounds that only the landlord corporate owner can be liable for violating the Act. &nbsp;The Court denied that motion, finding that if the employee assisted the owner in violating the Act by not making a reasonable accommodation (and taking affirmative action to threaten eviction, raise rents, etc.), then such employee can be personally liable. &nbsp;This case could be ultimately extended to Association Board members who abuse and harass legitimate homeowners seeking a reasonable accommodation.<br /><br /><span class="Apple-tab-span" style="white-space: pre;"> </span>As we can see, the law regarding emotional support animals is both confusing and evolving. &nbsp;If you are a disabled owner, it is best to provide good documentation so as to establish the required need for a reasonable accommodation. &nbsp;If you are an Association, it is best to establish, in advance, reasonable rules regarding emotional support animal requests, and to avoid discrimination claims by failing to properly review and approve such requests.<br /><br /><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County. &nbsp;They specialize in real estate and can assist associations and owners in addressing emotional support animal issues. &nbsp;They can be reached at 561.594.1452, or at mjposner@warddamon.com</i><br /><div><br /></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com2tag:blogger.com,1999:blog-5703675747421822056.post-51268254778029831782016-01-11T07:49:00.002-05:002016-01-11T07:50:03.920-05:00Reverse Mortgages - Pros and Cons<div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; In 1988, in an effort to keep older Americans in their homes, Congress passed the Reverse Mortgage bill, which authorized the Federal Housing Authority (FHA) and the United States Dept. of Housing and Urban Development to guarantee lenders who made home equity conversion mortgages.&nbsp; These specialized loans are limited to individuals 62 years or older for loans secured by their primary residence, and for a loan amount that provides a sufficient equity cushion so that at maturity the loan may be repaid.&nbsp; Reverse mortgages can be used on single family homes, condominiums and certain manufactured homes.<o:p></o:p></span></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0in;"><br /></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reverse mortgages do not require any payment of principal and interest as long as the borrower is alive or resides in the home as the primary residence.&nbsp; Interest on the reverse mortgage (which can be fixed or adjustable) accrues until the loan is repaid.&nbsp; The homeowner/borrower must still pay all taxes, insurance and maintenance on the residence.&nbsp; <o:p></o:p></span></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0in;"><br /></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">This waiver of payment is the main benefit of the program.&nbsp; For example, a homeowner with a $250,000 mortgage paying interest at 5.5% with fifteen years left will be paying $1,419.47 each month in principal and interest. With a balance of $167,000 after fifteen years, and a home value of $400,000, a homeowner over 62 could obtain a reverse mortgage of $191,200, pay off the earlier loan, pay all closing costs (which are generally higher than most loans and one source of complaints about reverse mortgages) and have about $20,000 available to pay taxes and insurance (or a vacation).&nbsp; After closing, the borrower will have the $1,419.47 in his or her pocket each month, an amount that may mean the difference between selling the home and keeping the home.<o:p></o:p></span></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><br /></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The funds from a reverse mortgage can be received in cash at closing, or available as a line of credit for future withdrawal.&nbsp; The availability of a line of credit at closing requires that the borrower have sufficient equity for the new loan (in many cases, paying off the existing loan plus closing costs reduces or eliminates the amount available to borrow).&nbsp; The proceeds from a reverse mortgage are not generally considered income and are not taxable, and will not affect social security or Medicaid benefits, but if the proceeds are held as liquid cash, that sum could disqualify a person from certain benefits and should be reviewed.<o:p></o:p></span></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><br /></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Loan repayment occurs when the homeowner dies, abandons the home or defaults under the terms and conditions of the loan (such as failure to pay taxes).&nbsp; For death or abandonment, the homeowner or his/her family gets twelve months to sell the property to pay back the loan.&nbsp; If the loan is not paid back, HUD may proceed to foreclose the loan, recover and sell the property to satisfy the debt.&nbsp; Since interest is accruing without repayment, the value of the property may not be sufficient to pay-off the loan.&nbsp; Unlike conventional mortgages (recourse loans), the borrower or the borrower’s estate is never liable for the loan or a deficiency due to the property being worth less than the loan balance (a non-recourse loan).&nbsp; <o:p></o:p></span></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><br /></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Since their introduction, reverse mortgages have become popular; there are presently nearly 500,000 active loans. Originally a refinance only program, the law was revised in 2009 to allow these loans to be used to purchase a new home, so long as the borrower can pay the difference between the reverse mortgage loan amount and the purchase price of the new home.<o:p></o:p></span></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><br /></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">There are several criticisms of the reverse mortgage program.&nbsp; High upfront costs are an issue and are frequently not properly discussed with borrowers.&nbsp; Interest rates are higher than conventional loans. &nbsp;Pressure sales tactics (including late night TV ads) have encouraged seniors to take out reverse mortgages, spend the money on vacations and gifts, without consideration of the ability to pay and maintain the property going forward.&nbsp; <o:p></o:p></span></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><br /></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Some elderly homeowners have been duped by the reverse mortgage/repair scam.&nbsp; An inspector tells an elderly person that he or she need many thousands in repairs or the home will collapse.&nbsp; Many cannot afford these “repairs,” but the scammer refers them to a home equity mortgage lender who arranges the reverse mortgage (even though the repairs are bogus or not necessary), taking huge fees from the unsuspecting owner desperate to fix the home.<o:p></o:p></span></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><br /></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Finally, some of the biggest critics are the children, who discover after their parents die that their house inheritance is worthless due to a reverse mortgage debt greater than the value of the home. Because of these issues, and the high default rate of nearly one in ten homes, HUD tightened lending requirements earlier this year to ensure that lenders carefully review borrowers’ financials to be sure they can continue to pay taxes and insurance required on the home.&nbsp; In some cases, loans that used to be granted are now denied, and in other cases the amount loaned will include a required set-aside for payment of taxes and insurance, reducing the amount available to the homeowner.<o:p></o:p></span></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><br /></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">A reverse mortgage can be a great tool for many homeowners, but it is a program that should be carefully reviewed to ensure that it fits an individual’s needs. Discussions with a CPA, your children and a HUD loan counselor are a must before taking out a reverse mortgage.<o:p></o:p></span></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><i style="text-indent: 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><br /></span></i></div><div align="left" class="MsoNormal" style="margin-left: 0in; text-indent: 0.5in;"><i style="text-indent: 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">Michael J Posner, Esq., a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; He serves as the HUD Foreclosure Commissioner for the state of Florida.&nbsp; They can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com</span></i></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com22tag:blogger.com,1999:blog-5703675747421822056.post-28163540895081866072015-11-07T08:40:00.002-05:002015-11-07T08:40:29.270-05:00How Realtors Get Paid (a true commission story)<div class="MsoNormal" style="text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; line-height: 115%;">&nbsp; &nbsp; &nbsp;Buying or selling a home is, for most people, the single most expensive transaction of their lives.&nbsp; At the center of most real estate deals is the real estate salesperson, hired by sellers to list their property for sale, market and advertise the home, and then assist in the contract and sale; and used (yes, used, see below) by buyers to find and show buyers possible homes based on the buyers’ personal criteria, and then to assist in the contract and purchase of the home.&nbsp; For these functions, a real estate salesperson is paid a commission based upon the sales price of the home.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; line-height: 115%;"><br /></span></div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; line-height: 115%;">&nbsp; &nbsp; &nbsp;Traditionally, there were two types of realtors involved in a real estate transaction.&nbsp; The “listing agent” was the person who was hired by the seller, placed the property on the multiple listing service (the MLS), and acted as the agent of the seller.&nbsp; The “selling agent” was the person hired by the buyer, who helped the buyer find a property and acted as agent for the buyer.&nbsp;&nbsp; In Florida, most realtors today act as transactional agents instead of as listing or selling agents. A transactional agent does not have a fiduciary relationship with the buyer or seller, nor does the transactional agent act as the single agent representative of the buyer or seller. However, a transactional agent does have a duty to deal honestly and fairly with both the buyer and seller, to disclose all known facts, and to use skilled care and diligence in the transaction. Despite the change to transactional agent status, payments are still traditionally made by the seller, and shared by the realtors involved in the transaction.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; line-height: 115%;"><br /></span></div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; line-height: 115%;">&nbsp; &nbsp; &nbsp;Both the listing agent and the selling agent are traditionally paid from the seller’s proceeds. Pursuant to the listing agreement, the seller of the property has contractually agreed to pay the listing agent a commission upon finding a buyer ready, willing and able to purchase the property. Included in that agreement is the right of the listing agent to share a portion of his or her commission with a selling agent. So even though the selling agent is being technically paid from the listing agent’s commission at most closings, it appears on the closing statement that the seller is paying both the selling agent and listing agent separately. In rare circumstances, a buyer would hire a “buyer’s agent,” who generally acts in the same manner as the selling agent, but is instead paid directly by the buyer at the closing, with the listing agent receiving the full real estate commission from the seller without making any payment to the buyer’s agent.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; line-height: 115%;">&nbsp; &nbsp; &nbsp;Traditionally, the amount of the real estate commission has been 6%. With both a listing agent and selling agent involved, each agent would receive one half of the commission, or 3%. Each realtor would then share a portion of that 3% commission with the broker (realtors in Florida cannot earn a commission, only licensed brokers). Generally, the split between realtor and broker is determined by the realtor’s independent contract with the broker, and varies from a 60/40% split for newer realtors, to a 90/10% split in favor of very experienced, successful realtors.&nbsp; If the listing agent is also acting as the selling agent, the realtor will keep all 6% of the commission.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; line-height: 115%;"><br /></span></div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; line-height: 115%;">&nbsp; &nbsp; &nbsp;The amount of the commission is determined at the time the seller enters into the listing agreement with the realtor. Some realtors are willing to negotiate the commission, but many will not, especially those who are very successful. One common reduced commission scheme is known as the 5/2/1 commission. With that type of listing, should the property be sold by the listing agent with the involvement of a selling agent, the total commission paid would be 5%, with the listing agent receiving 2% and the selling agent receiving 3%.&nbsp; If the listing agent sells the house without a selling agent, the listing agent receives 2%, and if the seller sells the home to a buyer without involving the realtor, than the listing agent receives only 1%.&nbsp; Keep in mind that the commission is what motivates the realtor to sell your property, and the best agents generally earn their 3- to 6% commission.</span></div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 115%; text-indent: 0.5in;"><br /></span></div><div class="MsoNormal" style="text-align: justify; text-indent: 0px;"><span style="font-size: 12pt; line-height: 115%; text-indent: 0.5in;"><span style="font-family: Times New Roman, serif;">&nbsp; &nbsp; &nbsp;</span></span><span style="font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 115%; text-indent: 0.5in;">Many people believe they can buy or sell a home without a realtor. As someone who has been in this business for over thirty years, it is my experience that in most cases you will still get the highest price only if you work with the realtor, and will find more homes as a buyer only when you work with a realtor. Working with a realtor who is familiar with your area (known as a realtor who farms an area) can get you inside information about communities, homes that have not been listed but may be for sale, and affiliates who can provide title, surveys, inspections, loans and other tools necessary when buying and selling homes. That is why, even though I could easily buy and sell property myself, I still work with a realtor when I sell and purchase.&nbsp; If you do your homework and find the right realtor, you should have success whether you are selling or purchasing a home.</span></div><div class="MsoNormal" style="text-align: justify; text-indent: 0px;"><i style="text-indent: 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><br /></span></i></div><div class="MsoNormal" style="text-align: justify; text-indent: 0px;"><i style="text-indent: 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">Michael J Posner, Esq., is a partner in Ward, Damon, Posner, Pheterson &amp; Bleau a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate law and business law, and can assist buyers and sellers in loans and purchases/sales.&nbsp; They can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com</span></i></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com8tag:blogger.com,1999:blog-5703675747421822056.post-17714492599765873682015-10-21T10:01:00.001-04:002015-10-21T10:01:15.933-04:00Unlicensed Practice of Law (Realtors and CAMS)<div class="MsoNormal">&nbsp; &nbsp; &nbsp; &nbsp;Realtors and Community Association Managers provide valuable real estate services to sellers and buyers of real estate, as well as managing homeowners and condominium associations respectively.&nbsp; However, in providing their respective services, they frequently have issues that have substantial legal ramifications in connection therewith and, in providing advice and opinions on same, run the risk of being accused of the unlicensed practice of law. Knowing what is permitted and what requires specific use of a licensed attorney is important for both Realtors and Community Association Managers.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For Realtors there is a substantial dichotomy between drafting contracts and drafting leases. The Florida Supreme Court held in 1950 in the case of <i>Keyes Co. v. Dade County Bar Association</i>that the drafting of the real estate contract by a licensed realtor who was a party to the transaction <b>did not</b>constitute the unlicensed practice of law. In 1992 the Supreme Court was asked if the drafting of a lease constituted the unlicensed practice of law and while the Supreme Court declined to specifically state so, they did adopt a formal lease which appears to restrict drafting of leases by Realtors without legal counsel except by utilizing the Florida Supreme Court approved forms.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notwithstanding the right to draft contracts, Realtors can cross the line when they modify preapproved forms adopted by the Florida Realtors Association or the Florida Bar. In addition, the drafting of a substantive addendum to said form contracts can also lead to a claim of unlicensed practice of law. Realtors should err on the side of caution and avoid making any material, substantive changes to the form contract or an addendum unless aided by a licensed attorney.&nbsp; Further, other than filling in the blanks on the Florida Supreme Court approved lease forms Realtors should not make any changes to the approved lease or utilize any other form lease unless done by a licensed attorney.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In 1996, the Florida Supreme Court issued an opinion regarding the activities of Community Association Managers.&nbsp; That opinion specifically set forth a number of areas in which the activities of a Community Association Manager would constitute the unlicensed practice of law. These activities included drafting of a Claim of Lien, preparing a Notice of Commencement, determining the timing, method and form for giving notices of meetings, determining the amount of votes necessary to approve any changes to the governing documents, and advising on the application of any statute or rule.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;">That opinion resulted in some confusion, and the Florida Bar Real Property, Probate and Trust Section (FRPTL) petitioned the Supreme Court to clarify that opinion regarding the areas or activities which, if completed solely by a Community Association Manager, would constitute the unlicensed practice of law. The Florida Supreme Court confirmed the 1996 opinion and further adopted the FRPTL proposed Advisory Opinion in its entirety.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">This opinion expanded the 1996 ruling and clarified by listing fourteen activities, which, if conducted by a Community Association Manager, would constitute the unlicensed practice of law.&nbsp; These include:<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The preparation of a certificate of assessment due once the matter is in collection with the Association’s attorney, after a foreclosure action has been filed or if a member of the Association has sent written notice disputing the assessed amount.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Drafting amendments to the constituent documents of an association.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Determining the number of days required for any statutory notice.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Modifying the state approve limited proxy form.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Preparing any documents in connection with the approval of new members to any Association.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Determining the number of votes necessary to pass an amendment to the constituent documents or the number of people necessary to establish a quorum.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Preparing pre-arbitration demand letters, construction lien documents, construction or management contracts.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewing contracts on behalf of the Association.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Determining through an examination of title parties to receive notice from the Association.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">10.&nbsp;&nbsp;&nbsp;&nbsp; Any activity that requires statutory or case law analysis to reach a legal conclusion.<o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">While these new rules do not greatly expand the limitations on the activities of Community Association Managers, they do clarify what limitations exist. However, in many cases, due to the original vagueness of the Florida Supreme Court opinion, it was not clear what activities would constitute the unlicensed practice of law. With the new opinion, community Association Managers have a clearer understanding of what they can and cannot do with regard to the enumerated items. Based on this new decision, it is clear that Community Association Managers will need to consult with an association’s attorney on a much more frequent basis in order to avoid a violation of this latest decision. <o:p></o:p></div><div class="MsoNormal" style="text-indent: .5in;"><br /></div><div class="MsoNormal" style="text-indent: .5in;">Even merely ministerial functions can be deemed to have crossed the line of what is illegal activity. Rather than make that determination for themselves Community Association Managers will be forced to seek legal counsel regarding such activities, potentially resulting in additional fees and costs for associations.&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate and can assist Realtors and Community Association Managers in all legal matters.&nbsp; They can be reached at 561.594.1452, or at mjposner@warddamon.com</i><o:p></o:p></div><div class="MsoNormal"><i><br /></i></div><div class="MsoNormal"><i>Links: &nbsp;<a href="http://www.flcourts.org/core/fileparse.php/304/urlt/Summary-UPL-Cases.pdf">Various Cases</a></i></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><a href="http://www.floridasupremecourt.org/decisions/2015/sc13-889.pdf">Supreme Court Opinion on CAMS</a></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com4tag:blogger.com,1999:blog-5703675747421822056.post-23729059598163982972015-10-06T15:45:00.002-04:002015-10-06T15:45:35.936-04:00Disclosure of Defects in Residential Sales<div class="MsoNormal">&nbsp; &nbsp; &nbsp;Prior to 1985, Florida subscribed to the legal theory of caveat emptor in connection with the sale of real property, either residential or commercial. However, the law changed as a result of the case of <i>Johnson v. Davis</i>.&nbsp; In that case, Davis entered into a purchase contract to purchase the Johnson’s home. The contract allowed them to make a full inspection of the home. &nbsp;Prior to making the second deposit, Davis discovered some peeling plaster around the corner of one window. When asked, Johnson advised that they “had had a minor problem that had long since been corrected and that the stains were wallpaper glue and the result of ceiling beams being moved.”&nbsp; <o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; Relying on that statement, Davis paid the additional deposit and Johnson moved out. Thereafter, Davis entered the home after heavy rain, and discovered water gushing from the window and the roof. Roofers were brought in by both the seller and buyer and a dispute arose as to whether the roof could be fixed or was fatally defective.&nbsp; Davis sued, alleging breach of contract, fraud and misrepresentation. Johnson counterclaimed seeking the deposit. At trial, the court awarded the initial $5,000 deposit to Johnson, gave the second deposit back to Davis and awarded no attorney’s fees.<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; Both sides appealed, and the appellate court affirmed the return of the second deposit to the Davis, but reversed as to the first deposit, ordering same to be returned to the Davis and that Davis be paid attorney’s fees. This decision was appealed to the Florida Supreme Court.&nbsp; The court concluded that Johnson knew that the roof was defective and their failure to disclose a material fact of a latent defect that they had full knowledge of entitled Davis to rescind the contract.&nbsp; The court went on to add, “The doctrine of caveat emptor does not exempt a seller from responsibility for the statements and representations which he makes to induce the buyer to act, when under the circumstances these amount to fraud in the legal sense.”<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; Since that decision, sellers have been obligated to disclose all material facts which affect the value of the property.&nbsp; In fact, the most common contract used in South Florida specifically states: “Seller knows of no facts materially affecting the value of the Real Property which are not readily observable and which have not been disclosed to Buyer.”<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; Since the <i>Johnson v. Davis</i> decision, the issue of actual knowledge has become a bone of contention. For years it was not clear whether knowledge meant “should have known” or actual knowledge. Under the theory of should have known, sellers could not put their head in the sand and ignore latent defects. However, recent case law indicates that actual knowledge is necessary in order to impose liability under the<i>Johnson v. Davis</i> standard.<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; In <i>Jensen v. Bailey</i>, a 2011 case, Bailey sued two years after closing claiming that substantial improvements were done without permits.&nbsp; Prior to closing, Jensen had completed a disclosure statement which specifically stated, “NO” to the following question of whether they were aware, “of any improvements or additions to the property, whether by you or by others, that have been constructed in violation of building codes or without necessary permits?"<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; After closing, Bailey discovered that the French Doors installed by Jensen was done without a permit, and further, that the work was not done properly. The trial court accepted the fact that Jensen was not aware of the lack of a permit, but still imposed liability under the<i> Johnson v. Davis</i>standard, and awarded damages, interest and attorney’s fees. In reversing the trial court the District Court found that to recover four elements must exist:&nbsp; “(1) the seller of a home must have knowledge of a defect in the property, (2) the defect must materially affect the value of the property, (3) the defect must be not readily observable and must be unknown to the buyer, and (4) the buyer must establish that the seller failed to disclose the defect to the buyer.” In the Jensen case, it was clear that three of the elements applied, but that knowledge was required to be actual and not the “should have known” standard. Since the trial court had accepted that Jensen was not actually aware of the lack of permits she could not be held liable for failing to disclose the lack of permits.<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; The most recent case on this issue is <i>Eiman v. Sullivan</i>.&nbsp; In that 2015 case, Eiman sold a piece of vacant land to Sullivan based on an “As-Is” vacant land contract. After closing Sullivan discovered that the property “contained a substantial amount of wetlands, swamp lands and/or low lying areas that had been filled-in by Eiman, or by persons working on Eiman’s behalf, and that a layer of muck existed below the fill dirt which would either prohibit the construction of their home or significantly and materially increase the cost for same.”&nbsp; The trial court agreed with Sullivan and awarded damages in the amount of $65,000.00.&nbsp; On appeal, Sullivan sought to show that Eiman knew or could have had actual knowledge of the defect by their actions of removing certain trees and their familiarity with the property. However, the appellate court found that there was no evidence that Eiman had actual knowledge of the alleged defect and this lack of this actual knowledge, proven at trial, was fatal to the Sullivan’s case. The decision was reversed and no damages were awarded to Sullivan.<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; There are two lessons to be learned from the preceding cases. First, perform good due diligence when buying property by hiring appropriate experts to determine the condition of the property as well as the status of all permits (or lack of permits) for any improvements. The second is to ask the right questions and to obtain proper written disclosures from your seller so that if there are latent defects of which they are aware you have a record of whether they disclose same.<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp; <i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate law and business law, and can assist buyers and sellers in loans and purchases/sales.&nbsp; They can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com<o:p></o:p></i></div><div class="MsoNormal"><i>&nbsp;&nbsp;&nbsp;&nbsp; </i><o:p></o:p></div><br /><div class="MsoNormal">&nbsp; &nbsp; &nbsp;<o:p></o:p></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com5tag:blogger.com,1999:blog-5703675747421822056.post-32656380151104241032015-09-26T10:36:00.001-04:002015-09-26T10:36:31.675-04:00Homestead and Trusts<div class="MsoNormal">&nbsp; &nbsp; &nbsp;Revocable Trusts are a common estate planning tool and can be effective in assisting in avoiding probate if properly created and funded.&nbsp; However, not everyone needs a revocable trust and certain issues can arise if a homestead property is placed as a trust asset.&nbsp; Homestead in Florida is a unique legal doctrine, and it is enshrined in the Florida Constitution under Article X, Section 4.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;As it relates to estates and probate, the Florida Constitution states that: "The homestead shall not be subject to devise if the owner is survived by spouse or minor child, except the homestead may be devised to the owner’s spouse if there be no minor child."&nbsp; Florida statutes provide further restrictions on the descent of constitutionally protected homestead property.&nbsp; Under Florida Statute Section 732.401(1) it provides:<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;">If not devised as authorized by law and the constitution, the homestead shall descend in the same manner as other intestate property; but if the decedent is survived by a spouse and one or more descendants, the surviving spouse shall take a life estate in the homestead, with a vested remainder to the descendants in being at the time of the decedent’s death <i>per stirpes</i>.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;This means that regardless of what any will or trust states, the homestead property is restricted from sale or transfer upon death of any owner. This issue can affect the best laid estate plans, especially in second or third marriages where long held property owned by one spouse in a carefully setup trust can be removed from a trust based estate plan by the act of marriage and moving into the subject home with a new spouse.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;This issue was recently the subject of a bitter battle between a widow and her deceased husband's two children from a previous marriage.&nbsp; The case of <i>Aronson v. Aronson</i> resulted in two separate appeals and provides a cautionary tale for proper estate planning amidst a second marriage, step-children, a revocable trust, a condo in Florida owned pre-marriage and a retirement to Florida.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;The facts of the <i>Aronson</i> case are simple.&nbsp; Mr. Aronson, while living outside of Florida, transferred his solely owned Florida condo to his own revocable trust.&nbsp; The trust provided that upon his death, all of his assets would transfer to his wife, for life, with the remainder to his two children from a previous marriage.&nbsp; In 2000, the couple sold the out of state residence (owned solely by the wife), and she used over $100,000.00 from the sale to satisfy the existing mortgage on the Florida condominium. They then moved into the Florida condominium as their permanent residence.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;The first mistake, which eventually led to the first appeal, was when Mr. Aronson individually tried to convey the condominium to his wife in 1997, even though he had already transferred the property to his trust.&nbsp; The Appeal Court ruled that even though it was his revocable trust, the deed by him individually was a nullity and did not convey any title.&nbsp; This issue could have easily been corrected by either having him convey from the trust, or, convey to himself first from the trust, then convey directly to his spouse.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;Mr. Aronson died in 2001, and the sole asset of the trust at his death was his homestead property in Florida where he resided with his wife.&nbsp; The trust provided, in addition to giving the wife a life estate in all assets, that she retained the yearly right to withdraw from the trust “the greater of Five Thousand ($5,000.00) Dollars or five (5%) per cent of the market value of the principal of this Trust”<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;After her loss in the first appeal, Ms. Aronson began making demands on the successor trustees (her step-children) for the annual trust payment, for reimbursement of the funds she paid to satisfy the mortgage on the condominium and for taxes and assessments due on the condominium, claiming that these were all obligation of the property owner (the Trust).&nbsp; Instead the successor trustees sought to sell the condominium to satisfy the Trust’s obligations to their step-mother, with the remaining funds distributed to themselves as beneficiaries.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;At trial, Ms. Aronson said that the property was her constitutionally protected homestead and therefore could not be devised by the successor trustees, even though the trust gave them that power.&nbsp; In addition, the trial court awarded her all of the requested reimbursements, plus the power to demand a five percent interest in the title to the condominium unit each year beyond her life estate.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;The Third District Court of Appeals reversed the trial court and found that while the property was homestead, it passed by law outside of the trust, and title vested in Ms. Aronson for life and the remainder passed to his two children.&nbsp; The Trust’s interest in the homestead property ended upon Mr. Aronson’s death.&nbsp; Further, since the trust no longer had any interest in the property, the obligation for all expenses remained with the surviving wife, as life tenant.&nbsp; As the trust had no other assets, the reimbursement for the annual payment was void, and the money Ms. Aronson paid to satisfy the mortgage was also not reimbursable, because even though she paid due to a mistaken belief the property was hers, Florida law did not provide for reimbursement from the two children as remaindermen.<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;The moral of this story is to properly plan for distribution of property and to uses trusts with homestead property carefully. If special distribution plans are needed for homestead property, it may be better to avoid using a trust and to properly convey the property under the guidance of a knowledgeable estate planning expert.<o:p></o:p></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal"><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate and estate planning, and can assist with trust and estate planning including homestead issues.&nbsp; They can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com</i>&nbsp; &nbsp;<i><o:p></o:p></i></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com4tag:blogger.com,1999:blog-5703675747421822056.post-22345272425905657432015-04-23T14:40:00.001-04:002015-04-23T14:40:11.239-04:00Social Media and Leasing<div class="MsoNormal">&nbsp; &nbsp; &nbsp;The Internet and Social Media has become a very powerful tool for people in determining where to eat, vacation, shop, purchase and live.&nbsp; Many small businesses can be permanently harmed by bad reviews posted on one of the many popular sites such as Yelp!, Trip Advisor or Facebook.&nbsp; These reviews can been seen by millions of consumers which is a phenomenon that simply did not exist twenty years ago.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;To combat the effect of negative reviews, an apartment complex in Orlando included a Social Media Addendum in their lease package for execution by new tenants.&nbsp; The Addendum’s preamble is reasonable, stating that “unjustified and defamatory reviews…can cripple a business by creating a false impression in the eyes of consumers.”&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;The Addendum then sets forth a prohibition against any negative reviews, stating, “Applicant will refrain from directly or indirectly publishing or airing negative commentary regarding the Unit…”&nbsp; To clarify its position, the Addendum states further that “Applicant shall not post negative commentary or reviews on Yelp!, Apartment Ratings, Facebook, or any other website or Internet-based publication or blog.”&nbsp; Instead of discouraging defamation through reviews, the Landlord, in the Addendum, was attempting to stifle all negative reviews by making it a breach of the lease if a negative review was posted, even if factually accurate.&nbsp; Even the determination of what was a negative review was subjective, making the Landlord the sole arbiter of negativity, “Owner shall make the determination of whether such commentary is harmful in Owner's sole discretion.”<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;In most lease contexts, a breach of a lease term provides the party with the right to terminate the lease and possibly actual damages incurred as a result of the breach.&nbsp; Instead, the Social Media Addendum provides for a liquidated damages clause upon posting of any negative review of “$10,000.00 for the first such breach, and an additional $5,000.00 for each subsequent breach…owed to Owner within ten (10) business days of the breach.”&nbsp; To add pressure, if a roommate writes the negative review, the liability extends to all tenants, as the Addendum provides that “the Applicants shall be jointly and severally liable to pay Owner liquidated damages…”<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;Finally, the Landlord attempted to claim ownership of “any and all rights, including all rights of copyright as set forth in the United States Copyright Act, in any and all written or photographic works regarding the Owner, the Unit, the property, or the apartments.”&nbsp; This is clearly an overreach and unlikely to be enforceable. The purpose of this claim is to be able to indicate to any website owner who is hosting written documents, pictures, or videos of the apartment complex that the landlord owns all copyright in the works and has the legal right to have such works removed from any website. Many websites, regardless of whether this provision is enforceable, would likely act and remove such items to avoid future claims.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;After the addendum became known to the public, the apartment complex stated that it would no longer use the addendum and that it would not attempt to enforce same against its current tenants. While the goals of the apartment complex were misplaced, there are things a landlord can do to at least protect themselves from certain actions taken by tenants with regard to social media.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;First, a landlord can agree with the tenant to make the terms and conditions of their lease confidential. The main reason for this is to prevent others from knowing the specifics of any lease transaction which may affect negotiations for other units with in an apartment complex. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;Second, landlords can enforce, against any tenant or third-party, defamatory or libelous statements which are not based on fact. While truth is usually a strong defense to any online social media posting, subjective opinion or outright falsehoods can be actionable, resulting in a claim against the tenant should a court determine that the facts are false contained in any such online posting or that the opinions go far beyond the underlying facts such that the intent is not to explain the facts but to harm or punish the landlord. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;Third, while probably not fully enforceable, landlords should always seek a mechanism to resolve issues and disputes prior to a tenant making online postings which could damage the ability of the landlord to lease in the future. For example, a clause could be added to a lease that states, “Tenant agrees, before posting any negative reviews, pictures or information on any website or social media site about the landlord or the premises, to give the landlord ten days’ written notice of the underlying issues and if the landlord timely corrects the issue, tenant agrees not to post or disclose the negative matter on any website or social media site.”&nbsp; Such clause would not prevent a subsequent posting by a tenant, but may discourage such action, especially if landlords are proactive in addressing tenant concerns.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp;&nbsp;Finally, rewarding positive reviews is always permissible and should be encouraged by landlords.&nbsp; For example, landlords can give discount coupons to tenants who post positive reviews on applicable social media websites. The tenants should be encouraged to give honest and factual opinions as part of any such program. Encouraging positive reviews and addressing negative issues before they lead to negative reviews is always the best weapon a landlord can have in promoting social media growth of their leased premises project to the world.<o:p></o:p></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal"><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate and business law, and can assist landlord and tenants in leasing, evictions and negative reviews.&nbsp; They can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com<o:p></o:p></i></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com8tag:blogger.com,1999:blog-5703675747421822056.post-59377614521571220822015-03-31T11:05:00.000-04:002015-03-31T11:05:04.992-04:00(In)Famous Houses<div class="MsoNormal">&nbsp; &nbsp; &nbsp;In a previous column I mentioned the story of the Amityville, New York house, the scene of a gruesome family murder that was sold, led to claimed paranormal activity, movies, books and more sequels, all detailing the house’s sordid past and its alleged possession.&nbsp; That house has been occupied and sold repeatedly despite its infamy, and without further incident.&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; Other famous or infamous houses face similar problems.&nbsp; The house used in the <i>Brady Bunch</i>is a real home in Studio City, California.&nbsp; The real house, built in 1959, was a one story, typical middle class home.&nbsp; A false second story façade was added for exterior shots and the home was frequently shown during the show’s run and many subsequent movies.&nbsp; Tourists continue to flock to the home, despite many years of change and the installation of a privacy fence.&nbsp; Simply google “the brady bunch house” and you will get 23,100 hits, including a <a href="http://www.zillow.com/">www.zillow.com</a> listing at <a href="http://tinyurl.com/4yfmj33">http://tinyurl.com/4yfmj33</a>. Given the notoriety, any listing would have to disclose this to prospective buyers.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;Another infamous house was the home leased to the Heaven’s Gate cult that committed mass suicide in the 9,200 square foot mansion in March, 1997.&nbsp; The notoriety and required disclosure drove the value of the home down from over $1.2 million to less than $700,000.00.&nbsp; Eventually, due to so many onlookers and no buyers, the neighbors bought the house, changed the street name and tore down the house, to protect their community.&nbsp; Apparently, a street name change with a slightly different address has solved the issue, as it appears that a multi-million dollar mansion is now located on the same property.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;One house affected by its notoriety is the Highland Park home of Cameron, Ferris’ best pal in the movie, <i>Ferris Bueller’s Day Off</i>, and the scene of the infamous Ferrari car kill.&nbsp; Originally listed for $2.3 million in 2009 with hopes that the film’s tie-in added value, it languished on the market for years despite a unique and historic architectural design.&nbsp; The home finally sold after five years on the market for less than $1.1 million.&nbsp; One factor that drove down the price was the constant presence of curious tourists, including some who trespassed to get a closer look.&nbsp; Zillow does not even mention the film in its listing at <a href="http://tinyurl.com/lmc9dg">http://tinyurl.com/lmc9dg</a>.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;The owners of the home in the movies Home Alone and Home Alone 2 put a large “Private Property – Stop” no trespassing sign right on their front lawn to stop the constant flow of trespassing tourists.&nbsp; Despite the sign, tourist intrusion is a fact of life for this famous house.&nbsp; Selling for $1.6 million in 2012, the home may not have suffered as much from the notoriety as some other famous houses, as Zillow still describes the home (<a href="http://tinyurl.com/ygwbdfq">http://tinyurl.com/ygwbdfq</a>) as, “the quintessential family home, as depicted in ‘Home Alone,’ filmed here 20 yrs ago.”<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp;An allegedly haunted house was the subject of a legal challenge of rescission when a buyer, after signing a contract, discovered the history of the home as “haunted.” Prior to the sale, the former owner had a deep knowledge of the home’s alleged haunted past. The owner had even written an article that was published in the 1977 Reader’s Digest, “<i>Our Haunted House on the Hudson</i>.”&nbsp; Prior to signing the contract, neither the seller who wrote the article, nor the listing agent, disclosed the haunted history to the buyer.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;The buyer, unaware of the history at the time of the sales contract, became concerned about the ghostly facts prior to closing and refused to close.&nbsp; The $32,500.00 deposit was retained by the seller for the buyer’s failure to close, and the buyer’s lawsuit was initially dismissed. The buyer appealed the dismissal and won on his claim for rescission. The appellate decision that followed is full of interesting and ghostly puns and can be found here:&nbsp;<a href="http://tinyurl.com/yzdcr6n">http://tinyurl.com/yzdcr6n</a>.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;The appellate court held that the Reader’s Digest article, in which the seller claimed the house was, in fact, haunted, rendered it haunted as a matter of law, whether or not it actually housed poltergeists. The court further held, as a result, that rescission was appropriate under those circumstances, despite New York’s then adherence to the legal rule of <i>Caveat Emptor</i>, or “buyer beware.”&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; Further, the court rejected the buyer’s additional claim of fraud, which sought damages against both the seller and broker, based on allegations that both parties had a duty to disclose the haunting. The court reiterated the general rule that neither party had a duty to disclose those facts. As a result, the court held that the buyer was entitled to rescission, return of the deposit and nothing more.&nbsp; Under Florida law, the opposite would have been true as to the fraud claim.&nbsp; Since 1985, the law in Florida is no longer <i>Caveat Emptor</i>, requiring sellers and brokers to reveal all material facts that affect the value of a home for sale.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp;In hindsight, the buyer of the haunted house may have made a financial mistake.&nbsp; The lovely home in Nyack, New York was sold for over $1.7 million in 2012, nearly triple what he would have paid in 1990.&nbsp; Because of possible issue underlying any home, the best advice to buyers on any home purchase is to ask questions and research any home thoroughly before buying lest something unwanted be discovered.<o:p></o:p></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate and business law, and can assist buyers and sellers in loans and purchases/sales.&nbsp; They can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com<o:p></o:p></i></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com9tag:blogger.com,1999:blog-5703675747421822056.post-72989090426446112082015-03-01T08:11:00.002-05:002015-03-01T08:11:23.139-05:00Real Estate in the Movies<div class="MsoNormal">&nbsp; &nbsp; &nbsp; &nbsp;With the Maltz Theater bringing back Glengarry Glen Ross, I thought this would be a good time to look at how various real estate issues are portrayed in cinema.&nbsp; From bad salesmen, bad spouses, and bad ghosts, real estate has been a good issue as a backdrop to explore the relationship between individuals, from greed, envy and fear.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><b><i>Glengarry Glen Ross<o:p></o:p></i></b></div><div class="MsoNormal"><br /></div><div class="MsoNormal" style="text-indent: .5in;">A classic Mamet play turned into an acclaimed picture, <i>Glengarry Glen Ross</i>tells the story of several real estate salesmen trying to keep their jobs in the seamy side of out of state land sales, cold calls and commission based sales.&nbsp; The name of the game is quality leads, those people who have expressed an interest in buying a timeshare, beach front land or a mountain or lake lot.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;To motivate his employees, the owners of the office send in a foul mouthed consultant played by Alec Baldwin, who motivates the salesman with the classic line, "As you all know first prize is a Cadillac El Dorado. Anyone wanna see second prize? Second prize is a set of steak knives. Third prize is you're fired."&nbsp; An all-star cast includes Jack Lemmon, as a washed out salesman, Kevin Spacey as the office manager who holds the keys to the best leads, Ed Harris, Alan Arkin and Al Pacino, the top closer, round out the cast.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;The techniques used in the movie to sell the land are still used today.&nbsp; ABC, "always be closing" is a key technique to sell what most rational people would deem worthless property by finding a buyer’s weakness and appealing to buyer's vanity, greed, sexuality and the like.&nbsp; These sales pitches, with come-ons like a free week-end, glossy brochures, or dream vacation spot that is available today only are almost always an exaggeration, designed to convince people, on an emotional level, to part with their money.&nbsp; Always research carefully and consult with an objective professional before any real estate investment is the key to not making a bad deal you will later regret.<o:p></o:p></div><div class="MsoNormal"><b style="text-indent: 0.5in;"><br /></b></div><div class="MsoNormal"><b style="text-indent: 0.5in;">The Money Pit</b></div><div class="MsoNormal"><br /></div><div class="MsoNormal" style="text-indent: .5in;">Buying a home as-is is very common in Florida real estate.&nbsp; Essentially the buyer relies on two things, the duty of a seller to disclose material facts about a home that affect value (such as a leaky roof, electrical problems, broken pumps, etc.) and the home inspection which is supposed to detect most patent defects.&nbsp; In <i>The Money Pit</i>, two urban yuppies have an opportunity to buy a “valuable home” on the cheap, with a seller claiming desperation and need for a quick sale. After a quick tour with the owner, who has hidden numerous defects, they rush and buy the home without any professional inspection, only to find it needs hundreds of thousands in repair.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal" style="text-indent: .5in;">The film starred Tom Hanks and Shelly Long as the couple who buy the disaster and then watch as the multi-month long repair process, with pricey contractors, sanctimonious inspectors and an ex-boyfriend drive them apart.&nbsp; Since they were not married, their split could have had substantial legal consequences, but like most movies, they reconcile at the end, to provide us with the requisite happy ending.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal" style="text-indent: .5in;">As they say, if it is too good to be true, it probably is, and rushing to buy a home without proper seller disclosure and a professional inspection can leave you with your own money pit.&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><b>The War of the Roses<o:p></o:p></b></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is often said that marriage is grand but divorce is $100,000 grand.&nbsp; In <i>The War of the Roses</i>, the battleground is over the ownership of a house between a divorcing couple played by Michael Douglas and Kathleen Turner.&nbsp; During their marriage, they purchase an old mansion, which Turner spends years improving until it is near perfect.&nbsp; At that point, with the house remodeling distraction over she realizes she despises Douglas, and demands a divorce, with a further demand she keep the house because she made it what it is, despite his funds paying for the improvements.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Instead of agreeing, or selling the house, they commence a war, escalating when Douglas, after being thrown out, manages to move back in to the very house in dispute, escalating the war, as the two continue to battle, destroying the house in the process.&nbsp; Eventually, there fight leaves them hanging from a chandelier, which due to the weight crashes down and kills them both.&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since neither would agree to allow the other to keep the house, the only legal recourse should have been a partition, where a court orders the sale of indivisible property (like a single family home).&nbsp; Either one could bid, with the sale proceeds being split equally.&nbsp; This simple process would have spared their lives, and allowed the one willing to pay the most to keep the house.&nbsp; Or better yet, sign a pre-nuptial agreement deciding in advance who gets what if the end of the marriage occurs.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><b>The Amityville Horror<o:p></o:p></b></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; &nbsp;A classic horror tale based on alleged real world events.&nbsp; In 1975, Ronald DeFeo, Jr. murdered his entire six member family in their home.&nbsp; The house remained vacant for over a year, and was then purchased for a bargain price by the Lutz family.&nbsp; Fulfilling her duty to disclose material facts that affect value, the Real Estate Broker disclosed the murders.&nbsp; The Lutz' moved in anyway and claimed they had to leave a month later due to claimed paranormal activity.&nbsp; They sold the rights to their experiences which led to a book, and twelve (yes, twelve) films, including the original 1979 version starring James Brolin and a 2005 remake with Ryan Reynolds.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp; &nbsp; The duty to disclose deaths, suicides and murders in homes is always a tricky issue.&nbsp; Generally isolated events of a non-heinous nature do not require disclosure if the disclosure would not affect the value as determined by a reasonable person.&nbsp; A mass murder as described in the movie less than two years ago does qualify as a must disclose issue.&nbsp; Florida law even protects sellers and realtors from having to make a disclosure, and buyers have no cause of action to sue “<i>for the failure to disclose to the transferee that the property was or was suspected to have been the site of a homicide, suicide, or death or that an occupant of that property was infected with human immunodeficiency virus or diagnosed with acquired immune deficiency syndrome</i>.” F.S. §689.25.<o:p></o:p></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal"><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate law and business law, and can assist buyers and sellers in loans and purchases/sales.&nbsp; They can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com</i><o:p></o:p></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com6tag:blogger.com,1999:blog-5703675747421822056.post-75451142393725752592015-02-12T09:24:00.002-05:002015-03-03T14:18:22.712-05:00The State of Real Estate 2015<div class="MsoNormal" style="text-align: justify;">&nbsp; &nbsp; &nbsp;<u>Mortgage Debt Relief Act</u>:&nbsp; This law was passed to aide homeowners whose mortgage loans were satisfied by foreclosure or short sale, with the remaining balance owed forgiven by their lenders.&nbsp; Prior to enactment, any debt forgiven by a lender was taxable as income to the former borrower unless they had been discharged in bankruptcy or were legally insolvent.&nbsp; For example, a $250,000.00 loan satisfied by a $150,000.00 short sale would have resulted in $100,000.00 in forgiven indebtedness.&nbsp; If treated as income, a tax of nearly $20,000.00 could be due.&nbsp; <o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp; &nbsp; This law expired December 31, 2013, but just last month the law was passed extending the exemption retroactively from January 1, 2014 to December 31, 2014. Therefore any applicable debt forgiven in 2014 will still be exempt from taxation.&nbsp; However attempts to extend the law for two years failed, so currently any debt forgiveness after December 31, 2014 would again be taxable.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp; &nbsp; &nbsp;<u>Protecting Tenants at Foreclosure Act</u>:&nbsp; This law was passed to give bone fide tenants up to ninety days after foreclosure sale to retain possession of their rental home as long as the tenant paid fair market rent to the party who acquired the property at foreclosure sale.&nbsp; Due to the foreclosure crisis many tenants became displaced after foreclosure with little notice or understanding.&nbsp; However, this law expired December 31, 2014, and it is unlikely that the law will be reinstated.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp; &nbsp;With the law now expired, tenants have no extra protection post sale.&nbsp; In Florida, most foreclosure judgments provide for virtually immediate possession after sale and issuance of a certificate of title.&nbsp; All that is necessary is for the Clerk of Court to issue a writ of possession, and the sheriff to post at the property, leaving tenants with only twenty-four hours' notice to vacate.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp; &nbsp; &nbsp;<u>Foreclosures</u>:&nbsp; Florida continues to lead the nation in foreclosures, with 1 in every 546 homes in the state in foreclosure according to RealtyTrac, with Palm Beach slightly better at 1 in 599 homes and Broward slightly worse at 1 in 520 homes.&nbsp; The good news is that the number of homes in foreclosure has declined nearly twenty-five percent and the trend is further downward, but there are still a lot of clean-up foreclosures either pending or nearly ready to be refiled.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp; &nbsp; &nbsp;<u>Statute of Limitations</u>:&nbsp; Many foreclosures were filed in 2006-2009 and were ultimately dismissed for a variety of reasons.&nbsp; After five years the cases were refiled by the lender, or an Association or subsequent owner has sued to quiet title.&nbsp; The issue in these cases is whether Florida's five year statute of limitations applies.&nbsp; If it does, the note and mortgage disappear, giving the property free and clear to the then property owner (usually a successor or Association).<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Two Florida Appellate Courts have rejected this argument, and held that the loans were still valid, only the payments more than five years old were lost.&nbsp; This preserved the lien of the mortgage and allowed the lender to complete its foreclosure.&nbsp; However, in two recent decisions the Third District Court of Appeal has reached a different conclusion, finding that in certain circumstances, after five years, the loan expires (even if the lien of the mortgage remains valid).&nbsp; This has created a conflict in the law, and ultimately will have to be decided by the Florida Supreme Court.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp; &nbsp; &nbsp;&nbsp;<u>Home Values</u>:&nbsp; 2014 was another good year for Florida home values, with <a href="http://zillow.com/">zillow.com</a><span id="goog_996714633"></span><span id="goog_996714634"></span><a href="https://www.blogger.com/"></a>&nbsp;finding that there was a 10.6% rise in 2014.&nbsp; They are also predicting a slower rise on 2015 of 2.3%.&nbsp; However, Palm Beach and Broward Counties both fell about 1% from 2013.&nbsp; Sales also fell in Broward County by about 6% with sales up by 9% in Palm Beach County.&nbsp; What had been a low price seller's market has stabilized with higher prices and a better balance between supply and demand.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp; &nbsp; &nbsp;&nbsp;Interest rates remain steady, with 30 year fixed rate loans hovering around 4%, with 15 year loans one point lower.&nbsp; Adjustable Rate 5/1 Loans are even lower with rates of about 2.75% fixed for five years.&nbsp; <o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp; &nbsp; &nbsp;&nbsp;While obtaining loans remains an issue due to credit and income restrictions, recent changes by FNMA and Freddie Mac has resulted in an expansion of low down payment loans (3%) which benefits lower income and first time home buyers.&nbsp; In addition, President Obama announced that the FHA will lower mortgage insurance premiums by one-half percent, saving homeowners nearly $900 annually.&nbsp; These programs, coupled with historically low rates, should help sustain the real estate market this year and possibly encourage new buyers into the market.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><br /><div class="MsoNormal" style="text-align: justify;"><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate law and business law, and can assist buyers and sellers in loans and purchases/sales.&nbsp; They can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com<o:p></o:p></i></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com6tag:blogger.com,1999:blog-5703675747421822056.post-44649573318609689452014-12-28T21:52:00.001-05:002014-12-28T21:53:55.301-05:00Cohabitation and Real Estate (a primer for gay and straight non-married couples who own or want to buy Real Estate)<div class="MsoNormal">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; In Florida, there are three recognized states of real property ownership. First is Tenants in Common in which each party owns a distinct interest of the real estate, generally 50-50 if equally shared but ownership can be in any percentage or multiple percentages if there are more than two owners.&nbsp; If the deed is silent on the percentage of ownership, the shares are always deemed as equal. Upon the death of anyone owner, the interest of that deceased owner passes to that owner’s heirs at law.&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The second estate is called Joint Tenancy, in which each owner owns the entire estate together and is distinct from Tenants in Common. If properly created, the interest of a deceased owner passes to the surviving joint tenant.&nbsp; In Florida, because a simple joint tenancy is deemed to create a tenants in common relationship it is crucial that the deed state “joint tenants with full rights of survivorship and not tenants in common” to make sure the intent of the parties at the time of creating the estate is met.&nbsp; Creditors of one of the joint tenants can lien and attach the joint tenant’s ownership interest, and upon foreclosure the purchaser of the property at the foreclosure sale becomes a tenant in common with the other owner, breaking the joint tenancy.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The third estate is called Tenants by the Entireties and is reserved to married couples in the state of Florida.&nbsp;&nbsp; In addition to having a survivorship benefit like a joint tenancy, the Tenants by the Entireties estate also prevents the creditors of one owner from reaching the interest held by the other owner.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Under current Florida law, gay marriage is not recognized, and therefore gay couples who are legally married in other states cannot take advantage of this type of estate.&nbsp; At the beginning of next year, the legal stay currently in effect regarding gay marriage will expire and it is possible that marriage certificates will be issued to gay couples while the case challenging the Florida constitutional prohibition on gay marriage is appealed. It would appear that if a gay couple obtains a marriage certificate then they will also be eligible to hold real property as Tenants by the Entireties.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Under Florida real property law simply stating “husband-and-wife” or “his/her spouse” after the grantee’s name in any deed creates the Tenants by the Entireties estate.&nbsp; No case has addressed whether stating “husband and husband” or “wife and wife” will be sufficient to create the desired estate. Therefore it is recommended the any deeds delivered to a gay married couple state with specificity the intent to create the Tenants by the Entireties estate. In addition, due to the uncertainty of the law, I would recommend also adding the following to any deed created while the gay marriage ban is appealed: “In the event it is determined that the Florida constitutional ban on gay marriage is constitutional, and the marital status of the grantees hereunder is voided, is the intent of the parties to create a joint tenancy with full rights of survivorship and not tenants in common.”&nbsp; Otherwise, if the estate is not created properly, the estate would revert to Tenants in Common which would not effectuate the right of survivorship that most couples desire.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Please also note that to create joint tenant estate or the tenant by the entireties estate certain elements must exist at the time of the conveyance as follows:<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The owners must acquire the property at the same time;<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The owners must have the same title to the property;<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The owners must have an equal share in the property; and<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The owners must have equal right to possession of the property.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Therefore, even if a gay couple currently owns Florida property jointly with their significant other, or were married in another state, the fact that the ban on gay marriage may become unconstitutional does not automatically create the Tenants by the Entireties estate. This also applies to couples who acquired property together before marriage and then thereafter became married, or who, prior to marriage, only held title in one of the spouse’s names.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In order to rectify the situation, it will be necessary for the owners to reconvey the property to themselves with the proper vesting language.&nbsp; For example, if Mary and Jane Smith acquired property in 2005 as joint tenants with right of survivorship, and legally become married in Florida after January 2015 they would have to execute a new deed to themselves conveying the property and asserting the creation of the Tenants by the Entireties estate. If only Mary Smith owned the property prior to the legal marriage, she would have to convey the property to both herself and Jane Smith to create the estate, and, if the property was there homestead, Jane Smith would have to join in the deed as the spouse of Mary Smith to clear her Homestead interest.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Many unmarried couples whether gay or not, who later become married, will find out the hard way that that deed which conveyed title to their property did not result in the survivor owning the property after their co-owners demise, but instead allowed the heirs of the deceased spouse to inherit. If you own property with another person which was acquired before marriage, you should take action to ensure that your interests are protected and that your intent to provide for survivorship is legally enacted.<o:p></o:p></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal"><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate and can assist owners in drafting deeds and trusts to insure proper transfer of assets.&nbsp; They can be reached at 561.594.1452, or at mjposner@warddamon.com<o:p></o:p></i></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com13tag:blogger.com,1999:blog-5703675747421822056.post-77001930282562278622014-10-24T11:34:00.002-04:002014-10-24T11:34:25.250-04:00E-Recording: a Curse and a Blessing<div class="MsoNormal">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; For years, clerks of courts, lenders and Realtors<sup>®</sup>have talked about e-execution and e-recording, heralding the move from paper to purely electronic forms, but for the most part the industry has resisted, with many concerns regarding security, validity and fraud.&nbsp; Tests have been held, a few loans closed with electronic signatures, but for the most part closings are done the same way as always, a closing agent prepares and prints the seller and buyer documents and the bank prepares the much larger paper loan package.&nbsp; In fact, the only nod to modernity is that instead of mailing or overnighting the 50 to 100 page loan package, printed at the lender’s expense; it is now sent electronically to the closing agent so they can print at their expense.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Well another milestone has been reached as Palm Beach County has joined most other Florida clerks in moving toward e-recording.&nbsp; Traditional recording required bringing the original document to the Clerk of Court who would stamp the document with a Clerk’s File Number and an Official Records Book and Page Number, then review the document, enter the pertinent information into the Clerk’s grantor grantee index, scan (or in the old days, photograph for microfilm or microfiche), place online for viewing (except documents deemed impermissible for online viewing such as custody and divorce documents), and then mail back the originals to the party listed on the document.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Under the new system, a registered title company, attorney or closing agent will log in to their online account with a private approved vendor, fill out the grantor grantee index, scan the original document to be recorded, and upload the document to the vendor who will then transmit the document to the Clerk to be recorded.&nbsp; The Clerk’s office will review the incoming documents, and then record same in the Public Records.&nbsp; Unless the Clerk’s office is diligent in reviewing the uploads, I expect far more index errors arising, as untrained processors input party names with misspellings, backwards (first name last) or in the wrong location (buyers as sellers, etc.).&nbsp; Without a proper index, the Clerk’s own database becomes useless as a tool for searching.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Palm Beach County Clerk’s office is touting this new system as both a money and time saver.&nbsp; They claim documents will be recorded faster, that courier fees paid to deliver documents to the Clerk will be eliminated and that less fraud due to gap issues will be obtained.&nbsp; The Clerk does not mention that they can also cut their budget by eliminating employees from their recording departments, but that is an issue for another day.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; While in theory these claims are true, in practice they may not always pan out.&nbsp; First, while it is true that e-recording will eliminate courier fees, the cost is simply replaced with new private vendor recording fees of about $5.00 per document to record.&nbsp; So to record a more complex closing with a deceased seller, the e-recording fee will likely exceed the average courier cost of about $19.00 to $25.00 for one file to simply deliver the same documents to the Clerk. In addition, for larger closing agents, sending ten closings in one day by courier will be far cheaper than e-filing fees. Of course, these new costs will simply be passed onto the buyer and seller.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gap issues have always been a risk that title companies assume.&nbsp; It is the window between the last available title search and the recording of the instrument that is being insured, when a title problem, defect or fraud can occur without notice.&nbsp; This window is usually five to ten days long depending on the county.&nbsp; While the clerk may update their records to within a few days, title agents <b>do not</b> rely on the Clerk’s online database to search and examine title.&nbsp; Instead, they use their title underwriter’s abstract plant to search and update title.&nbsp; Therefore, the alleged recording speed (by a few hours, at most) will not reduce gap issues.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Finally, we come to the million dollar question of original documents.&nbsp; With e-recording, it will be possible for less than scrupulous closing agents to record copies of executed documents without possession of the original.&nbsp; With time pressures to close, a closing agent waiting on the return of the originals may succumb and file a scanned copy to get the deal done.&nbsp; If the originals are different or never arrive (or are never sent), how valid will these recorded documents be without proper verification.&nbsp; This will likely lead too many cases being filed over disputed e-recorded “originals,” and more lost note/mortgage claims than ever before.&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; While I am all for technological advances, doing things just because we can is not always the best course, and touting systems without mentioning the risks and downside is always a dubious way to promote a new method of doing a traditional task.&nbsp; I for one hope they are more right than wrong.<o:p></o:p></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal"><i>Michael Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate law and business law, and can assist owners in buying and selling real property.&nbsp; They can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com<o:p></o:p></i></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com19tag:blogger.com,1999:blog-5703675747421822056.post-86661354356135310082014-09-20T17:08:00.004-04:002014-09-20T17:08:35.353-04:00The New Seller Financing Reality (Living in a Dodd-Frank World)<div class="MsoNormal">&nbsp; &nbsp; &nbsp; Purchase money financing or seller financing has been a traditional tool of investors and owners to expand the pool of buyers for their residential owner occupied real property. Many buyers have the ability to put money down or the ability to make monthly payments, but not the ability to qualify for institutional bank financing. This includes recently foreclosed homeowners who have now gotten back on their feet and desire to purchase a new home or those whose existing debt pushes them slightly above the “quality mortgage” requirement of a 43% debt to income ratio. If these buyers still want to buy a home their only option is borrowing money from either the seller or a “hard money” lender.&nbsp; Since “hard money” lenders frequently charge interest in the double digits, many buyers look for seller financing as a way to acquire a home, build credit and eventually pay off that loan by obtaining bank financing.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In Florida, when a seller finances the purchase of a property, the mortgage is labeled a “true purchase money mortgage.” This is to distinguish between financing provided by any third party, which is simply a “purchase money mortgage.”&nbsp; These seller loans are also sometimes referred to as “Vendor’s Lien.”&nbsp; Traditionally, seller financing usually has the following terms:<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short term of 2 to 5 years;<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A balloon payment at the end of the loan period;<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No review of the borrower’s ability to repay the loan, instead relying on the borrower’s down payment;<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Monthly payments of interest only or a loan amortized for less than 30 years;<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Higher interest rate than market and frequently an adjustable rate loan.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As a result of the recent real estate collapse, Congress adopted a new law known as the “Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).&nbsp; One of the consequences of Dodd-Frank is that now all seller financing is regulated by, and subject to, strict new rules adopted under the Act. Depending on certain factors, it may be impossible for a seller to provide true purchase money financing to borrowers because of the restrictive requirements.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; These requirements include that (i) the note cannot contain a balloon payment; (ii) the seller as lender must qualify the borrower in the same manner that an institutional lender qualifies a borrower for a loan; (iii) the interest rate must be fixed for at least five years and thereafter may only adjust two percentage points a year with a maximum of six percentage points; and (iv) the loan must have a term of 30 years. Given these restrictions, very few, if any, sellers will provide financing, which will either reduce the pool of potential buyers or drive the few buyers who can get financing only into the arms of institutional lenders. This will also result in sellers losing a secured loan paying 5 to 10% interest and instead be forced to deposit their sale proceeds in a money market account earning less than 1% with an institutional lender. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In recognizing the problems with these restrictions the Consumer Financial Protection Bureau adopted certain rules which loosened the restrictions on individual seller financing for one property in a 12 month period. These rules allow for a balloon payment and the seller does not have to qualify the borrower for the financing. The other rules still remain in effect.&nbsp; This means all seller financing that qualifies under these exceptions must still be amortized over 30 years and must still contain a fixed interest rate for the first five years with limitations on adjustments thereafter.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In adopting these new rules, sellers must keep in mind that they do not apply to sellers who constructed the home or if the seller is not an individual or trust. Many investors purchase property in a limited liability company. If that company is going to finance the sale, even if it is the only sale in a 12 month period, the rules described above apply without the exception.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; These new rules will act to put a severe damper on private financing of residential owner occupied property. It will result in fewer sales, drive otherwise eligible borrowers to institutional financing, and cause hardship borrowers to lose their homes because many small time “hard money” lenders make only a few loans to residential borrowers in a year, and will no longer be willing to lend with these restrictions.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Dodd-Frank restrictions are onerous and unwarranted and act as a substantial intrusion on private transactions. This is clearly the law of unintended consequences. While most of the Dodd-Frank rules relate to institutional lenders, the inclusion of the private seller financing restrictions is likely to cause substantial damage and expose those who finance owner-occupied residential property to claims by defaulting borrowers who are looking for any angle to avoid foreclosure.<o:p></o:p></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal"><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate law and can assist private lenders and sellers in all legal matters.&nbsp; They can be reached at 561.594.1452, or at mjposner@warddamon.com</i><o:p></o:p></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com29tag:blogger.com,1999:blog-5703675747421822056.post-27555278661853760972014-08-30T13:32:00.002-04:002014-08-30T13:32:50.162-04:00Latest Trends in Foreclosure<div class="MsoNormal" style="text-align: center;"><b>Statute of Limitations</b><o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; One big issue in the mortgage foreclosure world is the issue of the statute of limitations. Under Florida law mortgages that have expired for more than five years after the maturity date are deemed unenforceable. The legal question was whether mortgages that were in default for more than five years before a new foreclosure action was filed were actually enforceable.&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For example, a mortgage that went into default in 2007 and which had a mortgage foreclosure case filed in 2009 that was dismissed in 2011 with a new foreclosure case filed in 2014 six years after the acceleration notice was sent could have been found to be wiped out by the statute of limitations. Two appellate courts have reviewed cases with similar facts and have ruled that only payments that are more than five years delinquent are actually wiped out but the mortgage is still valid for the remaining sums due. These decisions balance the equity of a late filed foreclosure with the inequitable position of basically giving people free homes by not allowing the lenders to enforce otherwise valid mortgages.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It is very likely that this case will eventually be decided by the Florida Supreme Court. Given that two courts have held that the old mortgages are enforceable, it is very possible Supreme Court will agree, ending this legal debate.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal" style="text-align: center;"><b>Deficiency Judgments</b><o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Last year the Florida legislature amended the statute of limitations for deficiency judgments from five years to one year. This was due to the uncertainty caused by the five-year statute of limitations. As a result of the new law, lenders must bring an action to seek a deficiency judgment within one year after obtaining a foreclosure judgment.&nbsp; Prior to the new law, there were very few deficiency actions pending in residential foreclosures. However, recently there has been a substantial uptick in the number of deficiency actions filed especially by one law firm located in Texas.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The law firm of Dyck-O'Neal, Inc. has filed over 200 deficiency actions in the last several months. Many of these actions have caught homeowners by complete surprise believing that their foreclosure nightmare was over. The deficiency arises when the home that is foreclosed is worth less than the amount owed to the lender. After foreclosure, a lender has the option of either forgiving the deficiency in which case the homeowner may have tax consequences resulting from such forgiveness or the lender may proceed to obtain a money judgment for the difference.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In many cases, companies have purchased the right to pursue a deficiency judgment from the original lender at pennies on the dollar. They then pursue the former owners, many who have moved on and may even be in a position to pay money towards a deficiency judgment. In addition, once judgment is obtained it is like any other judgment in that wages and bank accounts can be garnished and property that is not protected can be foreclosed. <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal" style="text-align: center;"><b>Cash for Keys</b><o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; With the growing emphasis of preventing foreclosures many institutions and servicers are willing to work a deal with homeowners who have been in foreclosure for many years to basically trade the mortgaged home for what is commonly known as cash for keys. Basically, if the homeowner only has one mortgage, and no other liens or judgments, a homeowner can execute a deed in lieu of foreclosure to the lender which would end the foreclosure action. This would transfer title to the property to the bank. As an incentive, the bank pays the homeowner and agreed sum which the homeowner may use to pay relocation expenses. In addition, in many cases, the bank agrees to waive any deficiency.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The move out incentive varies from case to case and can be anywhere from $3000-$20,000. In addition, the homeowner avoids having a foreclosure judgment against them which may enable them to obtain a new home mortgage sooner than they could if a foreclosure judgment is entered. Finally, many lenders will even allow a homeowner to remain in possession for a period of time after the deed in lieu is executed in exchange for the homeowner’s agreement to maintain the property.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal" style="text-align: center;"><b>Shutting down phony trusts and class action companies</b><o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; At the height of the foreclosure crisis, many unscrupulous companies took advantage of homeowners who are facing foreclosure claiming that they had the secret to lower or eliminate mortgage debt. The first scheme involved transferring the property to a trust with the trust then suing the bank seeking to quiet title. Few lawsuits were actually filed and most were dismissed in favor of the bank. Another scheme involved claims of filing a class action lawsuit on behalf of multiple homeowners seeking to punish lenders for their aggressive lending tactics with the goal of lowering or eliminating the mortgage encumbering the consumer’s property. Again, few cases were filed with most of the efforts of the companies involved centering around hard sell tactics to obtain homeowners payment rather than pursuing legal actions.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Florida Attorney General has aggressively pursued these cases shutting down the most egregious trusts and recently the Florida Bar has commenced proceedings against the <a href="http://files.consumerfinance.gov/f/201407_cfpb_complaint_hoffman-law-group-et-al.pdf">Hoffman Law Group</a>, a law firm in North Palm Beach that has taken substantial sums from consumers as part of their attempts to file class-action lawsuits.&nbsp; It appears very little success has come from the law firm’s actions, and many homeowners are out thousands of dollars.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; With the recovering economy, and the increase in the value of many homes, the number of foreclosures has declined but there still is a substantial volume in process and may take many years for the levels to return to pre-crisis numbers.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><i>Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate law and can assist lenders and banks in all legal matters.&nbsp; They can be reached at 561.594.1452, or at mjposner@warddamon.com<o:p></o:p></i></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><br /></div><br /><div class="MsoNormal"><br /></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com17tag:blogger.com,1999:blog-5703675747421822056.post-62429884840239769262014-07-21T10:23:00.001-04:002014-07-21T10:23:16.428-04:00New Florida Condominium and HOA Law 2014<div class="MsoNormal" style="text-align: justify;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Another year and another round of tweaking to Florida’s Homeowners Association Act (Florida Statutes Chapter 720) and the Florida Condominium Act (Florida Statutes Chapter 718) have been enacted.&nbsp; The new laws were signed by the Governor on June 13, 2014 and went into effect on July 1, 2014.&nbsp; The new law is not very expansive but did clarify a few issues and expanded certain rights.&nbsp; Please note that the laws do not necessarily apply equally to both condominiums and homeowners associations, as a legislature continues to modify the applicable chapters inconsistently.</div><div class="MsoNormal"><o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Under current law, a Condominium Association has certain right to access a unit owner’s unit, “when necessary for the maintenance, repair, or replacement of any common elements” and “or as necessary to prevent damage to the common elements or to a unit.”&nbsp; Due to foreclosure, many units in Florida have become abandoned and the legislature took notice of this issue and expanded Florida law to grant an additional right of access to a Condominium Association when a unit is abandoned by the unit owner.&nbsp; Prior to access, the association must determine that the unit is abandoned and give the owner at least two days’ notice prior to access. This new right includes the right of the Association to turn utilities on and to inspect for and repair mold.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The insurance provision of the Condominium Act has been clarified to address non-insurable events. These are events that are either not covered by insurance or maybe for a loss of less than the minimum deductible of the Association’s insurance policy or for loss or repair due to ordinary use. The coverage of these losses to condominium property is now determined by looking at the declaration of condominium for the specific condominium in question.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In clarifying the right of the Associations to create a directory containing the name and address of each unit/homeowner the statute includes a provision that allows for multiple phone numbers to be listed, with the right to opt out still retained by each unit/homeowner by sending written notice to the Association. In addition, the Association may, with the consent of each unit/homeowner, include additional information in the directory, presumably the electronic mail address or other information that the unit/homeowner is willing to disclose to other owners.&nbsp; This provision is applicable to both Condominium and Homeowners Associations.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A current problem in many Condominium Associations is the transfer of power from one board to the next. The law will now require the outgoing board to turn over all official records in their possession within five days of the election of the new board. In addition, the Bureau of Condominium may impose civil penalties on those who fail to cooperate with this requirement.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In recognizing the greater use of electronic mail, the Condominium Act has also been expanded to allow board members to communicate via email with other board members without creating a quorum which would require a meeting open to all members. No voting is permitted by electronic mail.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In order to address a recent case that held that unit owner is not liable for previous owner’s assessments if the Condominium Association had foreclosed or took title to a unit, the statute now provides that a current owner is liable for assessments of the previous owner except for the period in which the Association held title to the unit. This commonly occurs when Association forecloses then subsequent to that foreclosure the bank forecloses and either the bank or a third-party obtains title from the bank foreclosure.&nbsp; This provision was added to the Homeowners Association Act in 2013.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In order to provide access to Homeowner Association meetings to disabled persons, the Act was amended to require Associations to provide disability access if requested by a handicapped person who is entitled to attend the meeting.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; An entirely new section was added to the Homeowners Association Act to address issues arising from an emergency situation. For purposes of this change, which is very similar to a previously enacted law affecting condominiums, an emergency is defined as a state of emergency affecting the area in which the association is located as called by the Governor. The difference between the Homeowners Association statute and the Condominium statute is that the Homeowners Association does not gain the right to access individual homes, a right that the Condominium Association retains.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Overall, the revisions were mostly minor and, in part, to clarify existing law or to unify certain parts of both Acts. Presumably, were substantial changes will be addressed by the legislature in upcoming sessions.<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;"><i>Michael Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; They specialize in real estate and can assist community associations in all legal matters.&nbsp; They can be reached at 561.594.1452, or at mjposner@warddamon.com</i><o:p></o:p></div><br /><div class="MsoNormal" style="text-align: justify;"><br /></div>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com26tag:blogger.com,1999:blog-5703675747421822056.post-23655363218669963712014-06-21T18:52:00.000-04:002014-06-21T18:52:00.674-04:00The Secret Language of Lawyers<div class="MsoNormal">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;All professions, be doctors, lawyers or baristas, have a secret language or code, which serves to both assist the profession by providing shortcuts for immediate explanations, but also to act as a barrier to entrance and to make the profession appear more important and above the normal person.&nbsp; Lawyers are especially not immune to that view and the secret language of lawyers is a mixture of Latin, Old French and Old English.&nbsp; While law schools these days try and teach “Plain English for Lawyers,” all new initiates seek to model their behavior like their peers, so the strange words continue to be used.&nbsp; Here are some of the most popular still used by lawyers in the real estate world.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Lis Pendens</b>:&nbsp;&nbsp; A Latin phrase for notice of a pending suit.&nbsp; Whenever an action involving real property is filed, a Lis Pendens must also be filed to notify all parties that an action involving a specific property has been commenced.&nbsp; Unlike pleadings, the Lis Pendens is also recorded in the public records and allows the lawsuit to have priority over subsequently filed liens, mortgages or other land interests (assuming the party that filed the Lis Pendens prevails).<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Ab Initio:&nbsp; </b>A Latin phrase that means from the start or beginning.&nbsp; Useful for conveying, at a later date, that an obligation was meant to commence or was invalid at a certain point.&nbsp; For example, a defective contract (missing a signature or key element) is often said to be void <i>ab initio.</i><o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Caveat Emptor</b>:&nbsp; A very popular Latin phrase for Buyer Beware.&nbsp; In residential transaction, the Florida Supreme Court has held it no longer applies (imposing a duty on seller’s to disclose material information that affects the value of the house), it still is prevalent in commercial transactions, as well as many contractual arrangements (as they say, always read and understand the fine print, or get a lawyer).<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Allonge</b>:&nbsp; &nbsp; &nbsp;An Old French law term that means to draw out.&nbsp; In common terms it is the endorsement on a negotiable instrument, such as a promissory note or a check (yes, when you sign your name on the back of a check you are creating an allonge in blank in favor of the bank which is cashing or depositing the check.&nbsp; The phrase “<i>Pay to the Order of XXX</i>” is a classic example of an Allonge.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Tenements, Hereditaments and Appurtenances, oh my</b>: Latin phrases used in deeds to convey the bundle of rights in real property. <i>Tenements</i> grant the right to hold the land (as opposed to own, which is reserved for the King); <i>Hereditaments</i> grants the right of inheritance, used so that the land conveyed goes to the buyer and their heirs; and <i>Appurtenances</i> are the improvements and fixtures attached to the land.&nbsp; An example is from a quit claim deed as follows: “<i>TOGETHER with all the <b>tenements</b>, <b>hereditaments</b> <b>and appurtenances</b> thereto belonging or in anywise appertaining and all the estate, right, title, interest, lien, equity, and claim whatsoever of said Grantor, either in law or in equity, to only the proper use, benefit and behoof of said Grantee, his heirs, successors and assigns forever.”</i><o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>et al</b>.: A Latin abbreviation for <i>et alii</i>, it simply means “and others” and is used as a useful shortcut to avoid having to list all parties to an action or contract.&nbsp; <o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Chattel</b>:&nbsp; Not to be confused with cattle (which are a form of chattel), it is an Old French Law term meaning personal property.&nbsp; Mostly archaic, occasionally still used to describe personal property or car loans such as a Chattel Mortgage.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Ultra Vires</b>:&nbsp; A Latin phrase meaning “beyond power,” it commonly comes up in disputes over corporate or substitute party actions as whether the act of the corporate officer or attorney-in-fact was beyond their legal authority.&nbsp; <i>Ultra vires</i> actions are unenforceable.&nbsp; In real estate, the use of powers of attorney are often subject to <i>ultra vires</i>attack, when actions are taken (sale or pledge of property) and the original owner contends that they did not grant that power to the attorney-in-fact.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Hypothecation</b>:&nbsp; A Latin phrase to pledge collateral.&nbsp; A mortgage on real property or <i>chattel</i> is a hypothecation.&nbsp; In Spanish, the word for mortgage is <i>hipoteca</i>, derived from this Latin word.<o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Fee Simple</b>:&nbsp; Derived from the Latin term <i>fief</i>, was a feudal right granted by a king or lord to allow use of lands in exchange for allegiance (which evolved into paying taxes).&nbsp; Eventually came to mean the right to own, mortgage, sell and devise land without a higher authority claiming an ownership interest.&nbsp; Most property interests today are conveyed in <i>fee simple</i>.<o:p></o:p></div><div class="MsoNormal"><br /></div><div class="MsoNormal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Knowing a few Latin phrases can make you a hit at your next cocktail party.&nbsp; Just remember <i>in vino veritas</i> (in wine, truth) before you claim to be an expert in Latin.&nbsp; There are lawyers everywhere ready to out Latin the layman.<o:p></o:p></div><div class="MsoNormal"><br /></div><i><span style="font-family: &quot;Arrus BT&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.&nbsp; He is Board Certified in Real Estate Law and can assist sellers, buyers and community associations in all real estate matters.&nbsp; He can be reached at 561.594.1452, or at mjposner@warddamon.com</span></i>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com23